BH Credit Catalysts recently published their January 2011 performance results, showing the net asset value per US share stood at USD10.08 representing a 1.79% gain and at 1007p per GBP share, representing a 1.75% gain for the month.
The fund employs a catalyst driven trading style where relatively small individual positions can become significant drivers of a future month’s returns, once an anticipated event occurs. An example of this actually happened in January 2011, with the SmurfitStone Container Corporation (SSCC), the US-based containerboard (cardboard box) manufacturer.
By the third quarter of 2010, all these catalysts were realised and bondholders received 95% of the company and the debt traded at par. Bonds was converted into equity and the Fund received a further 1 million shares originally priced at USD25 each. In January 2011, a bid was put in for the whole company, valuing the shares at USD35 each.
Though SSCC represented less than 2% of the fund’s NAV, it produced about a third of the Fund’s gains during the month.
