Boussard & Gavaudan Holding Ltd (EUR): Interim Management
Statement for the Quarter ended 31st March 2023
Please find attached the Interim Management Statement for the
Quarter ended 31st March 2023.
Boussard & Gavaudan Holding
Limited
A closed-ended investment company
incorporated with limited liability under the laws of Guernsey,
with registration number 45582.
Interim Management Statement
For the Quarter ended
31st March 2023
I. Principal
Activities
Boussard & Gavaudan Holding Limited (“BGHL”
or “the Company”), a closed-ended investment company incorporated
under the laws of Guernsey, announces its interim management
statement for the period from 1 January to 31 March 2023 (“the
period”).
The Company is registered with the Dutch
Authority for Financial Markets and is listed on the NYSE Euronext
Amsterdam, and the London Stock Exchange.
During the period, BGHL has invested indirectly
in BG Master Fund ICAV (“BG Fund” or “the Fund”), a Europe-focused
multi-strategy hedge fund established in Ireland and authorised by
the Central Bank as a Qualified Investor Fund (QIF), through a
dedicated share class of the feeder fund, BG Umbrella Fund Plc. The
Fund aims primarily at arbitraging instruments with linear or
non-linear pay-offs on equities and credit markets. The overall
investment objective of the Fund is to provide investors with
consistent absolute returns, primarily through investing and
trading in financial instruments of companies incorporated in, or
whose principal operations are in, Europe.
In addition, a proportion of the net assets of
BGHL may be invested in other hedge funds and/or other financial
assets.
Boussard & Gavaudan Investment Management
LLP (“BGIM” or “the Investment Manager”) is the Investment Manager
for both the Company and the Fund.
II. Highlights
|
|
31-Mar-23 |
31-Dec-22 |
Assets under management (€m) |
331 |
345 |
Market capitalisation (€m) |
273 |
276 |
Shares outstanding |
12,422,502 |
12,433,763 |
|
NAV per
Share |
Share
price* |
Discount to
NAV |
|
€
shares |
£
shares |
€
shares |
£
shares |
€
shares |
£
shares |
31-Mar-23 |
€ 26.64 |
£23.52 |
€ 22.00 |
£19.00 |
-17.42% |
-19.21% |
31-Dec-22 |
€ 27.77 |
£24.43 |
€ 22.20 |
£20.00 |
-20.06% |
-18.12% |
Performance |
-4.07% |
-3.73% |
-0.90% |
-5.00% |
|
|
*Amsterdam (AEX) market close for the Euro Share
and London (LSE) market close for the Sterling share
III. Performance
Global equity markets rallied during the period,
in particular in Europe with the Euro Stoxx 50® Total Return up
+14.2% while in the US the S&P500® Total Return was up +7.5%.
The market implied volatility measure VStoxx® dropped from 20.9% to
19.4% and credit markets tightened with the iTraxx Crossover® (S38)
moving from 474bps at year-end to 406ps at the end of March.
1. BG Fund
BG Fund (EUR B) contributed negatively for the
quarter.
1.1. Volatility
strategies
Mandatory Convertible Bond
Arbitrage
Mandatory convertible bonds contributed slightly
positively during the period with performance driven by a general
repricing in the market. No new issues were seen albeit the
Investment Manager remains confident that supply is coming given
the general pivot towards hybrid securities from issuers looking to
reduce borrowing costs.
Convertible Bond Arbitrage
The period saw convertible bonds giving back
some of its previously positive performance over the last few
months.
In particular, US convertibles suffered mainly
because of the Silicon Valley Bank (SVB) and Credit Suisse
situations, which caused the US two-year yield to drop very
quickly. The sharp drop in rates adversely impacted interest rate
hedges as convertible bond prices lagged; however these same hedges
have supported the portfolio against previous moves and the
Investment Manager expects some normalisation. Pricing for most
European CBs was generally soft due to higher credit spreads and
very low liquidity in the markets. There was no panic selling, but
poor liquidity meant some low prints in very small volumes.
The Investment Manager remains very constructive
on the positions in the book which continue to carry well. The
Investment Manager continues to grow the convertible book and sees
a growing number of prospective opportunities in the pipeline.
Volatility Trading
Volatility trading contributed positively to
performance in March as news flow helped to drive vol of vol
higher. The Investment Manager traded actively during the period of
maximum stress which had led to the creation of some very
attractive, albeit relatively short-lived, opportunities.
Dispersion strategies continued to carry well.
Warrant Trading
Warrant arbitrage & SPACs contributed
slightly positively.
1.2. Equity Strategies
Equity strategies suffered during the quarter.
They were initially impacted by a general rally in short hedges as
liquid stocks and indices outperformed idiosyncratic positions.
Following this, uncertainty caused by the SVB bankruptcy and the
Credit Suisse debacle, combined with renewed fears of recession
from weaker economic data generated some further market volatility.
This particularly impacted special situation positions as the
market worried that the unstable macro environment may delay those
catalysts. This notwithstanding the core theses remain intact and
the Investment Manager expects these positions to realised their
embedded value. Despite the market to market volatility the period
also saw several positions continue to perform well due to both
delivering strong results and where harder catalysts were
present.
Corporate activity is still much lower than
expected in M&A, but as the picture stabilises, and companies
adjust to the new interest rate environment, the Investment Manager
expects activity to pick up further.
1.3. Credit Strategies
Capital Structure Arbitrage
Capital structure arbitrage was flat.
Credit Long / Short
Credit long / short contributed positively
during the period benefiting from the general positive trend.
Credit Special Situations
Credit special situations were the main positive
contributor to performance this quarter thanks to a combination of
ongoing corporate improvements in the portfolio, a restructuring
trade which was finalised in March and due to be completed in July
as well as active trading around the restructuring of a Swiss
bank.
1.4. Trading
Trading contributed negatively during the period,
mostly due to the equity quantitative trading. This strategy has
been a very helpful tool for risk managing the portfolio for many
years however it has recently been too slow to react to rapid macro
developments and the position is being cut pending further
assessment.
2. Investments Other Than BG
Fund
The contribution of this investment was flat on
the period.
Rasaland Investors (“RLI”)
Rasaland Investors (“RLI”) RLI is a holding
company structured as a private equity fund in terms of fees and
organisation and managed by BK Partners. BGHL holds the RLI shares
through Campastros, S.L.U., a wholly-owned holding company in
Spain. RLI is dedicated to investing in land, hotels and high-end
resort developments in Mexico. RLI’s main asset is a majority
interest in ACTUR, a private company owning the land developing
assets. ACTUR’s other shareholders are Mexican public
institutions.
In July 2020, RLI made a cash tender offer to
buy back its own shares, for a price per share of US$0.12270. The
valuation of BGHL’s investment in RLI shares was marked down on 31
August 2020, using the US$0.12270 per share price as the estimated
fair value of the RLI shares. This price represents a circa 80%
discount to the latest published NAV per share.
IV. Outlook
The Investment Manager continues to be fully
committed to the strategies of the Company.
For further information contact:
Boussard & Gavaudan Investment
Management LLP
Emmanuel
Gavaudan (London) +44
(0)20 3751 5389
François-Xavier
Baud (Paris) +33
1 44 90 39 47
Disclaimer
The Company is established as a closed-ended
investment company domiciled in Guernsey. The Company has received
the necessary approval of the Guernsey Financial Services
Commission and the States of Guernsey Policy Council. The Company
is registered with the Dutch Authority for the Financial Markets as
a collective investment scheme pursuant to article 2:73 in
conjunction with 2:66 of the Dutch Financial Supervision Act (Wet
op het financieel toezicht). The shares of the
Company (the "Shares") are listed on Euronext Amsterdam.
The Shares are also listed on the Official List of the UK
Listing Authority and admitted to trading on the London Stock
Exchange plc's main market for listed securities.
This is not an offer to sell or a solicitation
of any offer to buy any securities in the United States or in any
other jurisdiction. This announcement is not intended to and does
not constitute, or form part of, any offer or invitation to
purchase any securities or the solicitation of any vote or approval
in any jurisdiction, nor shall there be any sale, issuance or
transfer of the securities referred to in this announcement in any
jurisdiction in contravention of applicable law.
Neither the Company nor BG Fund has been, and
neither will be, registered under the US Investment Company Act of
1940, as amended (the "Investment Company Act"). In addition the
securities referenced in this announcement have not been and will
not be registered under the US Securities Act of 1933, as amended
(the "Securities Act"). Consequently any such securities may not be
offered, sold or otherwise transferred within the United States or
to, or for the account or benefit of, US persons except in
accordance with the Securities Act or an exemption therefrom and
under circumstances which will not require the issuer of such
securities to register under the Investment Company Act. No public
offering of any securities will be made in the United States.
You should always bear in mind that:
- All investment is subject to risk;
- Results in the past are no guarantee of
future results;
- The investment performance of BGHL may go
down as well as up. You may not get back all of your original
investment; and
- If you are in any doubt about the
contents of this communication or if you consider making an
investment decision, you are advised to seek expert financial
advice.
This communication is for information purposes
only and the information contained in this communication should not
be relied upon as a substitute for financial or other professional
advice.
VC 01.05.15.01
usechatgpt init success
- Interim management Information - Q1 2023
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