ALTIN AG, the Swiss alternative investment company, finished the year down 7.52%, but thanks to its active management style, performed better than the HFRX index, which fell by 8.87%.
2011 was a year of significant market and liquidity risk. In this challenging environment, the company made two important decisions. The first, as a result of the increased market volatility mainly due to the European sovereign debt issues, was to reduce the leverage employed by 9%, to finish the year at a 17% level. The second was to diversify the portfolio by introducing 11 new investment strategies, which contributed to reducing the beta of equities in the portfolio. The best performance contributors were Macro and Long/Short Equity strategies, followed by Multi-Strategy and Event Driven funds.
Since early 2009, ALTIN’s positioning has been biased towards liquid strategies and liquid assets. This positioning was maintained in 2011 and ALTIN’s portfolio continues to hold a majority of investments with a redemption frequency term of 3 months or less.
Following the new high dividend policy announced on 24 November 2011, the Annual General Meeting accepted the Board’s proposal to pay a dividend of CHF 4.10 per share for 2011 out of share premium reserves. This amount corresponds to 7% of the NAV as per 31 December 2011 and represents a dividend yield of 9.3% based on the end-of-year share price, and is therefore significantly higher than initially announced.
The Board of Directors intends to maintain the dividend policy in future years and such a proposal will be submitted to the Annual General Meeting for approval on an annual basis. Should the dividend policy change, such change would be communicated in a press release.
As announced in November 2011, should the investment performance in the previous financial year be higher than 4% of the NAV, an additional distribution corresponding to 20% of the excess performance would be proposed to the shareholders. In the event that the company has a negative or sub 4% performance, the Board of Directors can decide whether such negative performance must be made up in future years when submitting their dividend proposal to the Annual General Meeting. Any decision would be published in a press release.
As at 31 December 2011, CHF55.9 million of share premium reserves (of which CHF53.2 million were approved by the Swiss Federal Tax Authority) were transferred from the General Reserve to a newly created Capital Contribution Reserve and will be available for future distribution free of withholding tax.