BH Global delivered non-correlated positive returns of nearly four per cent in 2008, according to the company’s final results.
The firm was launched on 29 May 2008 and raised over USD1bn, which was in excess of its USD500m target. All of the assets of the company, other than very small working capital requirements, are invested in the Brevan Howard Global Opportunities Master Fund.
It says NAV in each currency share class rose in all but one of the nine months of its existence to February 2009, the exception being the highly disturbed conditions seen in September.
In September the share price fell to open up a discount of around 10-15 per cent. Shortly before Christmas there was a further downward lurch of the whole fund of hedge funds sector, taking the discount to over 30 per cent.
Lord Turnbull, the company’s chairman (pictured), says the fall in the share price reflected the loss of liquidity in the market, with an overhang of distressed sellers or indiscriminate selling by investors who had lost confidence in the sector as a whole.
‘Since the turn of the year, however, conditions have improved somewhat and there has been growing differentiation in favour of those with successful investment strategies. By end January 2009 the discount had narrowed to around ten per cent,’ he says.
On 16 February 2009 the company announced that, subject to shareholder approval, it would establish arrangements for a partial return of capital each year at NAV less costs. This could be for an amount up to 100 per cent of the positive NAV performance in the previous financial year.
For 2009 in respect of the growth up to the end of 2008, the directors are proposing to offer up to five per cent of the issued shares of each class for sale by means of tender.
In October 2008 the company’s Sterling shares entered the FTSE 250 Index. BH Global was also listed on the Bermuda Stock Exchange on 20 October 2008 and on Nasdaq Dubai (US Dollar shares only) on 11 November 2008.
To assist liquidity, the option for shareholders to convert between currency classes was moved from quarterly to monthly in October 2008.
Lord Turnbull says: ‘The board remains confident that, despite the extreme turbulence of recent months, the closed ended listed model remains valid and can deliver the benefits envisaged for shareholders, and that on the basis of the track record; the underlying funds are capable of delivering consistent and non-correlated gains in NAV.’
