Fidante Partners Liquid Strategies ICAV (the ICAV ) Whitehelm Capital Listed Core Infrastructure Fund (the Sub-Fund )

Transcription

1 Fidante Partners Liquid Strategies ICAV (the ICAV ) Whitehelm Capital Listed Core Infrastructure Fund (the Sub-Fund ) Unaudited Interim Financial Statements For the period from 1 January 2017 to 30 June 2017

2 Contents Page General Information 1 Investment Manager s Report 2 Schedule of Investments 3-5 Condensed Statement of Financial Position 6 Condensed Statement of Comprehensive Income 7 Condensed Statement of Changes in Net Assets 8 Notes to the Financial Statements 9-13 Significant Portfolio Changes 14

3 General Information Board of Directors of the ICAV * Administrator, Register and Transfer Agent James F. McKeon (Independent) J.P. Morgan Administration Services (Ireland) Limited Victoria Parry (Independent) J.P. Morgan House Mark Woolhouse ** International Financial Services Centre Catherine Hales *** Dublin 1 Richard Banh (Alternate to Catherine Hales) *** Ireland * All Directors are non-executive Secretary ** Mark Woolhouse resigned on 22 March 2017 MFD Secretaries Limited *** Catherine Hales and Richard Banh were appointed on 21 June Molesworth Street Dublin 2 Ireland Platform Manager and Distributor Fidante Partners (Europe) Limited Irish Legal Advisers 1 Tudor Street Maples and Calder London 75 St Stephen s Green ECAY OAH Dublin 2 United Kingdom Ireland Investment Manager to the Sub-Fund Auditor and Irish Tax Advisers Whitehelm Capital Pty Limited KPMG Level 1, 39 Brisbane Avenue 1 Harbourmaster Place Barton, ACT 2600 International Financial Services Centre Australia Dublin 1 Ireland Depositary J.P. Morgan Bank (Ireland) plc Registered Office JP Morgan House Fidante Partners Liquid Strategies ICAV International Financial Services Centre 32 Molesworth Street Dublin 1 Dublin 2 Ireland Ireland 1

4 Investment Manager s report For the period 1 January 2017 to 30 June 2017 About The Sub-Fund The Whitehelm Listed Core Infrastructure Class X (USD Hedged) and Class A (USD Unhedged) share classes were launched on 30 and 31 May The Whitehelm Capital Listed Core Infrastructure Fund (LCIF) (the Sub-Fund ) is a long-only equity fund which aims to provide investors with exposure to a diversified portfolio of global core infrastructure stocks. The portfolio holds quality core infrastructure assets listed in developed markets. Currently 42 stocks are held (allowed range 40-60), these are held at equal weight and rebalanced monthly. Primary Benchmark: OECD CPI +5% p.a. Secondary Benchmark: FTSE Developed Core Infrastructure Index The FTSE Developed Core Infrastructure Index is used as a reference benchmark only. The LCIF is benchmark unaware in its construction. Whitehelm Capital takes a strict approach to defining what is core infrastructure, with the aim of providing defensive, inflation linked returns over the long term. The quality of the assets is first and foremost in the stock selection process, with a strong focus on the free cash flow generation of the assets. Turnover of the LCIF is low, reflecting the longer term view taken in stock selection. Annualised one way turnover since inception is 21%. Environmental, governance and social factors are integrated into the management of the portfolio, and all proxies are actively voted. During the past six months Whitehelm Capital has been accepted as a signatory to the United Nations-backed Principles for Responsible Investment (PRI), and has subscribed to the ISS Socially Responsible Investment (SRI) policy for proxy voting research and recommendations. Performance The table below show the net performance of Class A and Class X for the six months to 30 June 2017, and since inception. Table 1: Net Performance Class A (USD Unhedged) 6 MONTHS TO 30 JUNE 2017 SINCE INCEPTION LCIF Class A % 20.2% OECD CPI +5% p.a. 3.8% 7.7% FTSE Developed Core Infrastructure Index 11.0% 15.0% 1 Net of 1.1% p.a. fees. Table 2: Net Performance Class X (USD Hedged) 6 MONTHS TO 30 JUNE 2017 SINCE INCEPTION LCIF Class X % 20.6% OECD CPI +5% p.a. 3.8% 7.7% FTSE Developed Core Infrastructure Index 9.4% 15.6% 2 Net of 0.4% p.a. fees. Performance over the six months to 30 June 2017 was very strong, with Class A and Class X returning 15.9% and 12.2% respectively. All sectors contributed positively to this performance with exception of the sole water utility holding, SJW Corporation. Transport infrastructure stocks provided the highest returns for the period, particularly the European airport holdings, the North American railroad holdings, and the Italian toll road holdings. US and European utilities also performed solidly, benefitting from continued easy monetary policy, although this did reverse slightly in the last week of June with an increase in long term government bond yields. Whitehelm Capital Pty Limited August

5 Schedule of Investments As at 30 June 2017 Fair Value % of Net Investments Currency Holding USD '000 Asset Value Equities (2016: 96.01%) Australia (2016: 2.37%) AusNet Services AUD 941,320 1, Australia total 1, Belgium (2016: 2.42%) Elia System Operator SA/NV EUR 22,310 1, Belgium total 1, Canada (2016: 9.09%) Canadian National Railway Co. CAD 16,240 1, Canadian Pacific Railway Ltd. CAD 7,610 1, Fortis, Inc. CAD 36,301 1, Canada total 3, France (2016: 4.64%) Aeroports de Paris EUR 8,630 1, Eutelsat Communications SA EUR 46,550 1, France total 2, Germany (2016: 2.33%) Fraport AG Frankfurt Airport Services Worldwide EUR 15,800 1, Germany total 1, Hong Kong (2016: 4.55%) CLP Holdings Ltd. HKD 118,000 1, MTR Corp. Ltd. HKD 211,000 1, Hong Kong total 2, Italy (2016: 11.46%) A2A SpA EUR 739,660 1, Atlantia SpA EUR 47,400 1, Snam SpA EUR 279,420 1, Societa Iniziative Autostradali e Servizi SpA EUR 112,390 1, Terna Rete Elettrica Nazionale SpA EUR 222,860 1, Italy total 6, Japan (2016: 11.18%) East Japan Railway Co. JPY 12,500 1, Osaka Gas Co. Ltd. JPY 322,000 1, Toho Gas Co. Ltd. JPY 167,000 1, Tokyo Gas Co. Ltd. JPY 229,000 1, West Japan Railway Co. JPY 17,700 1, Japan total 6, Luxembourg (2016: 2.36%) SES SA EUR 51,620 1, Luxembourg total 1,

6 Schedule of Investments (continued) As at 30 June 2017 Fair Value % of Net Investments Currency Holding USD '000 Asset Value Equities (continued) Spain (2016: 9.20%) Aena SA EUR 6,670 1, Enagas SA EUR 43,600 1, Endesa SA EUR 52,120 1, Gas Natural SDG SA EUR 55,890 1, Red Electrica Corp. SA EUR 55,890 1, Spain total 6, Switzerland (2016: 2.32%) Flughafen Zurich AG CHF 5,520 1, Switzerland total 1, United Kingdom (2016: 4.62%) National Grid plc GBP 98,865 1, SSE plc GBP 62,910 1, United Kingdom total 2, United States (2016: 29.47%) Ameren Corp. USD 21,990 1, Avista Corp. USD 28,640 1, Black Hills Corp. USD 17,680 1, Consolidated Edison, Inc. USD 14,990 1, CSX Corp. USD 23,700 1, Duke Energy Corp. USD 14,230 1, Hawaiian Electric Industries, Inc. USD 35,500 1, National Fuel Gas Co. USD 22,400 1, Norfolk Southern Corp. USD 10,080 1, Pinnacle West Capital Corp. USD 14,270 1, PPL Corp. USD 31,260 1, SJW Group USD 25,380 1, Union Pacific Corp. USD 11,330 1, United States total 15, Total investments in Equities 52, Underlying Currency Amount Currency Amount Exposure Maturity Fair Value % of Net Purchased Purchased Sold Sold USD '000 Date USD '000 Asset Value Forward Currency Contracts 1 USD 1,950,015 HKD 15,199,000 1,947 18/07/ USD 5,066,139 JPY 563,071,000 5,006 18/07/ Total unrealised gain on Forward Currency Contracts (2016: 0.04%)

7 Schedule of Investments (continued) As at 30 June 2017 Underlying Currency Amount Currency Amount Exposure Maturity Fair Value % of Net Purchased Purchased Sold Sold USD '000 Date USD '000 Asset Value Forward Currency Contracts 1 (continued) USD 998,966 AUD 1,315,000 1,011 18/07/2017 (11) (0.02) USD 2,995,287 CAD 3,953,000 3,048 18/07/2017 (54) (0.10) USD 1,067,561 CHF 1,038,000 1,082 18/07/2017 (16) (0.03) USD 15,573,720 EUR 13,925,000 15,904 18/07/2017 (343) (0.64) USD 1,962,134 GBP 1,537,000 2,002 18/07/2017 (41) (0.07) Total unrealised loss on Forward Currency Contracts (2016: (0.46)%) (465) (0.86) Total financial assets at fair value through profit or loss 52, Total financial liabilities at fair value through profit or loss (465) (0.86) Cash and cash equivalents 1, Other assets and liabilities Net asset value attributable to redeemable participating shareholders 53, Analysis of total assets % of total assets Transferable securities admitted to official stock exchange listing or traded on a regulated market Over-the-counter financial derivative instruments 0.11 Other assets 4.13 Total Assets Forward currency contracts are traded with the following counterparty: Macquarie Bank. 5

8 Condensed Statement of Financial Position As at As at Notes 30 June December 2016 USD '000 USD '000 Current Assets Financial Assets at Fair Value Through Profit or Loss: Equities 4 52,152 46,327 Derivative Financial Assets ,211 46,345 Financial Assets measured at Amortised Cost: Cash and Cash Equivalents 7 1,966 2,071 Other Receivables Total Current Assets 54,461 48,547 Current Liabilities Financial Liabilities at Fair Value Through Profit or Loss: Derivative Financial Liabilities Financial Liabilities measured at Amortised Cost: Payables and Other Liabilities Total Liabilities (excluding net assets attributable to holders of Redeemable Participating Shares) Net Asset Value Attributable to Redeemable Participating Shareholders at the end of the period 53,895 48,254 The accompanying notes form an integral part of the financial statements. 6

9 Condensed Statement of Comprehensive Income Investment Income/(Expense) For the period 1 January 2017 to 30 June 2017 For the period 25 May 2016 to 30 June 2016 USD '000 USD '000 Dividend Income 1, Net Realised Gain/(Loss) on Financial Assets Held at Fair Value Through Profit or Loss 753 (30) Net Realised Loss on Financial Derivative Instruments (1,349) (128) Net Change in Unrealised Gain on Financial Assets Held at Fair Value Through Profit or Loss 6, Net Change in Unrealised Loss on Financial Derivative Instruments (204) (143) Total Investment Income 6, Operating Expenses (144) (13) Finance Costs Distribution to Shareholders (550) - Foreign Withholding Tax (160) (17) Total Finance Costs 710 (17) Net Increase in Net Assets Attributable to Redeemable Participating Shares 5, In arriving at the results for the period, all amounts relate to continuing operations. The accompanying notes form an integral part of the financial statements. 7

10 Condensed Statement of Changes in Net Assets For the period 1 January 2017 to 30 June 2017 For the period 25 May 2016 to 30 June 2016 USD '000 USD '000 Change in Net Assets Net Increase in Net Assets Attributable to redeemable Participating Shareholders From Operations 5, Capital Transactions Subscriptions 31 36,010 Redemptions - - Total Capital Transactions 31 36,010 Total Increase for the Period 5,641 36,419 Net Assets Attributable to Holders of Redeemable Participating Shares Beginning of Period 48,254 - End of Period 53,895 36,419 The accompanying notes form an integral part of the financial statements. 8

11 Notes to Financial Statements For the period from 1 January 2017 to 30 June General Whitehelm Capital Listed Core Infrastructure Fund (the "Sub-Fund") is a Sub-Fund of Fidante Partners Liquid Strategies ICAV (the "ICAV") and was approved by the Central Bank of Ireland (the Central Bank ) on 25 May The ICAV is an openended umbrella with segregated liability between Sub-Funds. The ICAV is authorised by the Central Bank pursuant to the European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations 2011 as amended ( UCITS Regulations ) and the Central Bank (Supervision and Enforcement) Act 2013 (Section 48(1)) (Undertakings for Collective Investment in Transferable Securities) Regulations 2015 as amended ( Central Bank UCITS Regulations ). The ICAV is organised in the form of an umbrella fund and on 30 June 2017 had four Sub-Funds: Commenced Operation Keynes Dynamic Beta Strategy Fund 24 July 2015 PWP North American Equity Long Short Fund 17 May 2016 Whitehelm Capital Listed Core Infrastructure Fund 30 May 2016 WyeTree North American ABS Fund 4 January Basis of Preparation Statement of Compliance The financial statements have been prepared in accordance with the Financial Reporting Standards 104; Interim Financial Reporting Standard applicable in the UK and Republic of Ireland ( FRS 104 ) as issued in March 2015 and the Irish Collective Asset-management Vehicles Act 2015 and the Central Bank UCITS Regulations. The profit and loss account is referred to as the Condensed Statement of Comprehensive Income and the balance sheet is referred to as the Condensed Statement of Financial Position. All gains and losses are reported in the Condensed Statement of Comprehensive Income. 3. Significant Accounting Policies The Sub-Fund has availed of the exemption contained in Financial Reporting Standard ( FRS 102 ), Section 7.1A, Cash Flow Statements, not to present a cash-flow statement. There have been no changes to the significant accounting policies adopted by the ICAV since the last audited financial statements on 31 December Fair Values of Financial Assets and Financial Liabilities The Sub-Fund has adopted the amendments to FRS 102, Fair Value Hierarchy Disclosures, which are effective for accounting periods beginning on or after 1 January These amendments require the Sub-Fund to categorise its fair value measurements into the levels consistent with the fair value hierarchy set out in International Financial Reporting Standards as adopted for use in the European Union. For financial instruments held at fair value in the Condensed Statement of Financial Position, the Sub-Fund discloses for each class of financial instrument, an analysis of the level in the fair value hierarchy, into which the fair value measurements are categorised. A fair value measurement is categorised in its entirety on the basis of the lowest level input that is significant to the fair value measurement in its entirety. The Sub-Fund utilises various methods to value investments measured at fair value on a recurring and non-recurring basis. FRS 102 establishes a fair value hierarchy that prioritises inputs to valuation methods. 9

12 Notes to Financial Statements (continued) For the period from 1 January 2017 to 30 June Fair Values of Financial Assets and Financial Liabilities (continued) For the purpose of these fair value disclosures, the fair value of the financial instruments has been determined using the following fair value hierarchy categories: Level 1: The unadjusted quoted price in an active market for identical assets or liabilities that the entity can access at the measurement date; Level 2: Inputs other than quoted prices included within Level 1 that are observable (i.e. developed using market data) for the asset or liability, either directly or indirectly; or Level 3: Inputs are unobservable (i.e. for which market data is unavailable) for the asset or liability. Inputs are used in applying the various valuation techniques and broadly refer to the assumptions that market participants use to make valuation decisions, including assumptions about risk. Inputs may include price information, volatility statistics, specific and broad credit data, liquidity statistics and other factors. A financial instrument's level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. However, the determination of what constitutes 'observable' requires significant judgement by the Sub-Fund. The Sub-Fund considers observable data to be that market data which is readily available, regularly distributed or updated, reliable and verifiable, not proprietary, and provided by independent sources that are actively involved in the relevant market. The categorisation of a financial instrument within the hierarchy is based upon the pricing transparency of the instrument and does not necessarily correspond to the Sub-Fund s perceived risk of that instrument. Financial instruments whose values are based on quoted market prices in active markets are classified within Level 1, includes all listed equities and futures contracts with regular independent quotes. Financial instruments that trade in markets that are not considered to be active, but are valued based on quoted market prices, dealer quotations or alternative pricing sources supported by observable inputs are classified within Level 2. These include certain Financial Derivative Instruments where the price is calculated internally using observable data. Financial instruments classified as Level 2 traded in markets may be adjusted to reflect illiquidity, such adjustments are based on available market information. All other unquoted instruments are classified into Level 3 by default. The following table summarises the inputs used to value the Sub-Fund s financial instruments measured at fair value on a recurring and non-recurring basis as at 30 June 2017: Fair value Measurement at 30 June 2017: Level 1 Level 2 Level 3 Total USD '000 USD '000 USD '000 USD '000 Financial Assets at Fair Value Through Profit and Loss Equities 52, ,152 Forward Currency Contracts Total Financial Assets 52, ,211 Financial Liabilities at Fair Value Through Profit or Loss Forward Currency Contracts - (465) - (465) Total Financial Liabilities - (465) - (465) 10

13 Notes to Financial Statements (continued) For the period from 1 January 2017 to 30 June Fair Values of Financial Assets and Financial Liabilities (continued) The following table summarises the inputs used to value the Sub-Fund s financial instruments measured at fair value on a recurring and non-recurring basis as at 31 December 2016: Fair value Measurement at 31 December 2016: Level 1 Level 2 Level 3 Total USD '000 USD '000 USD '000 USD '000 Financial Assets at Fair Value Through Profit and Loss Equities 46, ,327 Forward Currency Contracts Total Financial Assets 46, ,345 Financial Liabilities at Fair Value Through Profit or Loss Forward Currency Contracts - (219) - (219) Total Financial Liabilities - (219) - (219) 5. Net Asset Value Per Share The Net Asset Value per Share is determined by dividing the value of the net assets of the portfolio by the total number of Shares in issue at that time in the below table: 30 June December 2016 A USD (Unhedged) Shares Net Asset Value Attributable to Redeemable Participating Shareholders USD '000 11,069 9,546 Shares in issue 93,016 92,023 Net Asset Value per Share USD June December 2016 X USD (Hedged) Shares Net Asset Value Attributable to Redeemable Participating Shareholders USD '000 42,826 38,708 Shares in issue 360, ,000 Net Asset Value per Share USD Distribution Policy Dividends paid during the period ended 30 June 2017 was USD 549,536 (30 June 2016: USD Nil). 7. Cash Balances All cash balances are held with J.P. Morgan Bank (Ireland) plc. 11

14 Notes to Financial Statements (continued) For the period from 1 January 2017 to 30 June Connected Persons and Related Parties Connected Persons The Directors, the Platform Manager, the Investment Manager, the Administrator and the Depositary and their respective affiliates, officers, Directors and Shareholders, employees and agents (each a "Connected Person" for these purposes, collectively the "Connected Persons") are or may be involved in other financial, investment and professional activities which may on occasion cause a conflict of interest with the management of the ICAV and/or their respective roles with respect to the ICAV. Related Parties Whitehelm Capital Pty Limited, a related company of Fidante Partners Europe Limited within the Challenger Limited Group, held Class A USD (Unhedged) shares (31 December 2016: 100) in the Sub-Fund as at 30 June Challenger Life Company Limited, a related company of Fidante Partners Europe Limited within the Challenger Limited Group, held 360,000 Class X USD (Hedged) shares (31 December 2016: 360,000) in the Sub-Fund as at 30 June Fees are paid as an Investment Management fee to the Investment Manager and a Platform Manager fee to the Platform Manager. James F. McKeon, Director of the ICAV, was an employee of Maples & Calder, the Irish Legal Advisers to the ICAV, until 31 December James F. McKeon is entitled to receive directors fees of EUR 15,000 per annum from the ICAV. Legal fees payable to Maples & Calder during the period were EUR 10,047 (30 June 2016: EUR 16,642) of which EUR Nil (30 June 2016: 16,642) were treated as establishment expenses and borne by the Sub-Fund and EUR 10,047 (30 June 2016: EUR Nil) were paid by the Platform Manager. 9. Exchange Rates The principal exchange rates to the US Dollar used in the preparation of the financial statements were: 30 June December 2016 Currency Rate Rate AUD Australian Dollar CAD Canadian Dollar CHF Swiss Franc EUR Euro GBP British Pound HKD Hong Kong Dollar JPY Japanese Yen SGD Singapore Dollar Source: The exchange rates are sourced from Reuters. 10. Soft Commissions There were no soft commission arrangements in place for the Sub-Fund for the period ended 30 June 2017 (31 December 2016: Nil). 11. Contingent Liability There were no contingent liabilities as at 30 June 2017 (31 December 2016: Nil). 12. Significant Events During the Period On 22 March 2017, Mark Woolhouse resigned as a Director of the ICAV. On 21 June 2017, Catherine Hales was appointed as a Director of the ICAV and Richard Banh as an Alternate Director (to Catherine Hales) of the ICAV. 12

15 Notes to Financial Statements (continued) For the period from 1 January 2017 to 30 June Significant Events After the Period End There were no significant events after the period end. 14. Approval of Financial Statements The Financial Statements were approved by the Board of Directors on 24 August

16 Significant Portfolio Changes For the six months ended 30 June 2017 Purchases* Holding Investments Cost USD '000 63,240 Red Electrica Corp. SA 1,176 31,260 PPL Corp. 1,152 28,640 Avista Corp. 1,127 5,930 SJW Group ,100 Snam SpA ,000 Toho Gas Co. Ltd ,290 National Fuel Gas Co ,000 Osaka Gas Co. Ltd ,800 National Grid plc Norfolk Southern Corp ,000 Tokyo Gas Co. Ltd ,050 Enagas SA 101 5,530 Eutelsat Communications SA 101 2,740 Hawaiian Electric Industries, Inc. 93 1,000 East Japan Railway Co. 90 4,720 SSE plc Union Pacific Corp. 86 3,780 SES SA Ameren Corp. 49 Sales Holding Investments Proceeds USD '000 24,020 TransCanada Corp. 1,146 17,100 ALLETE, Inc. 1,135 39,590 Great Plains Energy, Inc. 1,132 15,580 Eutelsat Communications SA 372 6,350 CSX Corp ,020 Aeroports de Paris 263 1,390 Aena SA 239 3,260 Fraport AG Frankfurt Airport Services Worldwide ,500 Societa Iniziative Autostradali e Servizi SpA ,900 A2A SpA 211 7,350 Red Electrica Corp. SA ,000 Tokyo Gas Co. Ltd ,332 Italgas SpA 133 1,070 Norfolk Southern Corp ,500 Terna Rete Elettrica Nazionale SpA 121 3,900 Enagas SA Flughafen Zurich AG 104 1,000 East Japan Railway Co ,000 MTR Corp. Ltd. 94 4,240 Gas Natural SDG SA 91 3,790 SES SA 88 58,500 AusNet Services 70 The Central Bank of Ireland requires a schedule of material changes in the composition of the portfolio during the period. These are defined as aggregate purchases of a security exceeding one per cent of the total value of purchases for the period and aggregate disposals greater than one per cent of the total value of sales. At a minimum the largest 20 purchases and 20 sales must be given or all purchases and sales if less than 20. A full listing of the portfolio changes for the period is available, upon request, at no extra cost from the Administrator. *There were 19 purchases during the period. 14