New Capital Alternative Strategies plc

Transcription

1 New Capital Alternative Strategies plc Annual report and audited financial statements for the financial year ended 30 June 2017 New Capital Alternative Strategies plc is a company incorporated with limited liability as an investment company with variable capital under the laws of Ireland. It is an umbrella fund with segregated liability between sub-funds. Alternative Investment Fund Manager EFG Asset Management (UK) Limited, London

2 Table of Contents Directory 2 General Information 3 Directors Report 4 Investment Objectives 8 New Capital Multi-Hedge Focus Fund - Commentary 9 New Capital Multi-Hedge Focus Fund - Portfolio Statement 10 New Capital Multi-Hedge Focus Fund - Portfolio Changes (unaudited) 12 New Capital Tactical Opportunities Fund - Commentary 13 New Capital Tactical Opportunities Fund - Portfolio Statement 14 New Capital Tactical Opportunities Fund - Portfolio Changes (unaudited) 17 Statement of Net Assets 18 Statement of Operations 19 Statement of Changes in Net Assets Attributable to Redeemable Participating Shareholders 20 Notes to the Financial Statements 21 Report of the Depositary 39 Independent Auditors Report 40 Additional Notes (unaudited) 42 Appendix (unaudited) 47 1

3 Directory Board of Directors Mozamil Afzal Executive Director and Chief Executive Officer EFG Asset Management (UK) Limited London, United Kingdom Steven Johnson Director and Chief Operations Officer EFG Asset Management (UK) Limited London, United Kingdom Nicholas Carpenter Assistant Director of Operations, EFG Asset Management (UK) Limited London, United Kingdom John Hamrock Independent non-executive Director Dublin, Ireland Karl McEneff Independent non-executive Director Dublin, Ireland Frank Connolly Non-executive Director Principal and Senior Consultant KB Associates Dublin, Ireland Administrator and Registrar HSBC Securities Services (Ireland) DAC 1 Grand Canal Square Grand Canal Harbour Dublin 2, Ireland Company Secretary KB Associates Ground Floor 5 George s Dock IFSC Dublin 1, Ireland Depositary HSBC Institutional Trust Services (Ireland) DAC 1 Grand Canal Square Grand Canal Harbour Dublin 2, Ireland Independent Auditors PricewaterhouseCoopers Chartered Accountants & Registered Auditors One Spencer Dock North Wall Quay Dublin 1, Ireland Registered Address of the Company 5 George s Dock IFSC Dublin 1, Ireland Irish Legal Advisers Dillon Eustace 33 Sir John Rogerson s Quay Dublin 2, Ireland Alternative Investment Fund Manager ( AIFM ) EFG Asset Management (UK) Limited Leconfield House Curzon Street London W1J 5JB, United Kingdom Investment Manager New Capital Multi-Hedge Focus Fund (from 18 April 2017) EFG Asset Management (Switzerland) SA 24 Quai du Seujet P.O. Box 2391, 1211 Geneva 2, Switzerland 2

4 General Information Principal Activities New Capital Alternative Strategies plc (the Company ) was incorporated and registered in Ireland as an umbrella type investment company with variable capital on 24 July It is an open-ended umbrella type investment company with variable capital authorised by the Central Bank of Ireland pursuant to the provisions of the Companies Act 2014, (as amended). Reports The annual report and audited financial statements of the Company will be made available to shareholders within six months from the end of the period to which they relate. Unaudited half-yearly reports will also be available to shareholders within two months of the end of the period. As at 30 June 2017 the Company comprised two separate sub-funds, New Capital Multi-Hedge Focus Fund (formerly known as New Capital All Weather UCITS Fund) and New Capital Tactical Opportunities Fund. Shares in each sub-fund may be classified into one or more classes. A separate portfolio of assets will be maintained for each sub-fund and will be invested in accordance with the investment objective and policies applicable to such a sub-fund as set out on page 8. The Company delisted from Irish Stock exchange on 1 September Application for shares If applying to buy shares for the first time, the application should be made in writing to the Company by completing the application form prescribed (from time to time by the Board and delivering the original application form) to the Administrator (HSBC Securities Services (Ireland) DAC) as delegate of the Company as specified in the relevant supplement of the Prospectus or application form. Subsequent applications to buy shares can be submitted to the Company in writing by post, by facsimile, by or by telephone. Redemption of shares Shareholders may request a repurchase by facsimile or other written communication or such other means as may from time to time be specified by the Board or their delegate in accordance with the requirements of the Central Bank of Ireland (in each case specifying the shareholder s full name, address and account number). Publication of prices Prices are available from the Administrator and will be published when calculated in the Morningstar, Bloomberg and in such other newspapers or media as the Board may instruct the Administrator. 3

5 Directors Report The Board of Directors (the Board ) present herewith the annual report and audited financial statements for the financial year ended 30 June The Company is an umbrella type investment company which at the financial year end had two established sub-funds, New Capital Multi- Hedge Focus Fund (formerly known as New Capital All Weather UCITS Fund) and New Capital Tactical Opportunities Fund. Directors The Board of the Company at 30 June 2017 were: Mozamil Afzal Steven Johnson Nicholas Carpenter John Hamrock Karl McEneff Frank Connolly Statement of Directors Responsibilities The Board is responsible for preparing the financial statements on a going concern basis and in accordance with the Companies Act, 2014 (as amended) and Generally Accepted Accounting Practice in Ireland including the Financial Reporting Standard ( FRS ) applicable in the UK and Republic of Ireland ( FRS 102 ) (accounting standards issued by the Financial Reporting Council and promulgated by the Institute of Chartered Accountants in Ireland). Irish company law requires the Board to prepare statements for each financial period which give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that period. Under Irish law, the Board shall not approve the financial statements unless they are satisfied that they give a true and fair view of the Company s assets, liabilities and financial position as at the end of the financial year and the profit or loss of the Company for the financial year. In preparing these financial statements, the Board are required to: select suitable accounting policies and then apply them consistently; make judgements and estimates that are reasonable and prudent; state whether the financial statements have been prepared in accordance with applicable accounting standards and identify the standards in question, subject to any material departures from those standards being disclosed and explained in the notes to the financial statements; and prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business. The Board confirm that they have complied with the above requirements in preparing the financial statements. The Board are responsible for keeping adequate accounting records that are sufficient to: correctly record and explain the transactions of the Company; enable, at any time, the assets, liabilities, financial position and profit or loss of the Company to be determined with reasonable accuracy; and enable the Board to ensure that the financial statements comply with the Companies Act, 2014(as amended) and enable those financial statements to be audited. The Board has delegated custody of the Company s assets to HSBC Institutional Trust Services (Ireland) DAC, 1 Grand Canal Square, Grand Canal Harbour, Dublin 2, Ireland. The Board are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. Principal Activities The Company has been approved by the Central Bank of Ireland as an open ended umbrella type company with variable capital pursuant to the provisions of Part 24 of the Companies Act, 2014 (as amended). Accounting records The measures taken by the Board to secure compliance with the Company s obligation to keep adequate accounting records are the use of appropriate systems and procedures and employment of competent persons. The accounting records are kept at HSBC Securities Services (Ireland) DAC, 1 Grand Canal Square, Grand Canal Harbour, Dublin 2, Ireland. Review of Business and Future Developments The Company's profit has increased since prior year due to the over performing of HFRX Global Hedge Fund Index and HFRI Fund of Funds Composite Index. The Company is expecting to make profits in the future even though the Company's net asset value decreased by 34% during the financial year ended 30 June The following major events occurred during the financial year: The Company delisted from Irish Stock Exchange on 1 September With effect from 29 September 2016, HSBC Securities Services (Ireland) Limited and HSBC Institutional Trust Services (Ireland) Limited have changed their names to HSBC Securities Services (Ireland) DAC and HSBC Institutional Trust Services (Ireland) DAC respectively. Revised Articles of Association of the Company were agreed during a shareholders meeting on 30 December The Company issued a new prospectus on 18 April 2017 to reflect the changes associated with New Capital Multi-Hedge Focus Fund which was formerly known as New Capital All Weather UCITS Fund. 4

6 Directors Report (continued) There was no other change in the nature of the Company s business during the financial year. Further details can be found in the Alternative Investment Fund Manager s Commentaries set out on pages 9 and 13. Risk Management objectives and policies Details of the risk management objectives and policies are shown on pages 33 to 37 in note 18. As at 30 June 2016 Sterling class Number of shares held Value of shareholding in GBP As a percentage of sub- fund Net Asset Value Directors and Secretary s Interests The Board of Directors are not aware of any shareholding in the Company by any Director, the Secretary or their families during the financial year ended 30 June 2017 other than the following: New Capital Multi-Hedge Focus Fund As at 30 June 2017 Sterling class Number of shares held Value of shareholding in GBP As a percentage of sub- fund Net Asset Value Mozamil Afzal , % As at 30 June 2016 Sterling class Number of shares held Value of shareholding in GBP As a percentage of sub- fund Net Asset Value Mozamil Afzal , % New Capital Tactical Opportunities Fund As at 30 June 2017 Sterling class Number of shares held Value of shareholding in GBP As a percentage of sub- fund Net Asset Value Mozamil Afzal 1, , % US Dollar class Number of shares held Value of shareholding in As a percentage of sub- fund Net Asset Value Mozamil Afzal 1, , % Mozamil Afzal 1, , % US Dollar class Number of shares held Value of shareholding in As a percentage of sub- fund Net Asset Value Mozamil Afzal 1, , % Transactions Involving Directors The Board are not aware of any contracts or arrangements of any significance in relation to the business of the Company in which the Board had any interest apart from the contract between the Company and the AIFM of which Mozamil Afzal, Nicholas Carpenter and Steven Johnson are employees and the contract between the Company and KB Associates, who provide operational, compliance and company secretarial services to the Company and of which Frank Connolly is an employee. Financial Reporting Process The Board has delegated to the Administrator, HSBC Securities Services (Ireland) DAC, the responsibility for establishing and maintaining adequate internal control and risk management systems of the Company in relation to the financial reporting process whilst maintaining effective oversight of this process. Such systems are designed to manage rather than eliminate the risk of failure to achieve the Company s financial reporting objectives and can only provide reasonable and not absolute assurance against material misstatement or loss. This includes appointing the Administrator to maintain the accounting records of the Company independently of the Depositary. The Administrator is contractually obliged to maintain proper books and records as required by the Administration Agreement dated August 2016 between HSBC Securities Services (Ireland) DAC and the Company as may be amended from time to time and in compliance with local laws. To that end the Administrator performs regular reconciliations of its records to those of the Depositary. The Administrator is also contractually obliged to prepare for review and approval by the Board the annual report including financial statements intended to give a true and fair view of the affairs of the Company. 5

7 Directors Report (continued) The Board evaluates and discusses significant accounting and reporting issues as the need arises. The Board also assesses and evaluates the Administrator s financial accounting and reporting routines and further assesses and evaluates the independent auditors performance, qualifications and independence. The Administrator has operating responsibility for internal controls in relation to the financial reporting process and the Administrator s report to the Board. Risk Assessment The Board is responsible for assessing the risk of irregularities whether caused by fraud or error in financial reporting and ensuring the processes are in place for the timely identification of internal and external matters with a potential effect on financial reporting. The Board has also put in place processes to identify changes in accounting rules and recommendations and to ensure that these changes are accurately reflected in the Company s financial statements. Control Activities The Administrator is contractually obliged to design and maintain control structures to manage the risks which the Board judges to be significant for internal control over financial reporting. These control structures include appropriate division of responsibilities and specific control activities aimed at detecting or preventing the risk of significant deficiencies in financial reporting for every significant account in the financial statements and the related notes in the Company s annual report. Examples of control activities exercised by the Administrator include approval of transactions, analytical procedures, reconciliations and automatic controls in IT systems. In the event that prices are not available from external independent sources, the Board has approved the use of a pricing committee, comprised of certain Directors of the Company, to review and make decisions on the value of any securities that the Pricing department of the Administrator cannot determine. Information and communication The Company s policies and the Board s instructions with relevance for financial reporting are updated and communicated via appropriate channels, such as , correspondence and meetings to ensure that all financial reporting information requirements are met in a complete and accurate manner. Monitoring The Board receives regular presentations and reviews reports from the Depositary, AIFM and the Administrator, where appropriate. The Board also has an annual process to ensure that appropriate measures are taken to consider and address any shortcomings identified and measures recommended by the independent auditors. KB Associates provides operational and compliance support to the Company. Shareholder meetings The Annual General Meetings of the Company are held in Ireland. Twenty one day notice is given in respect of each general meeting. A proxy may attend on behalf of any shareholder. An ordinary resolution is a resolution passed by a plurality of votes cast and a special resolution is a resolution passed by a majority of 75% or more of the votes cast. Each of the shares entitles the holder to attend and vote at meetings of the Company. Matters may be determined by a meeting of shareholders on a show of hands unless a poll is requested. Each shareholder has one vote on a show of hands. Each share gives the holder one vote in relation to any matters relating to the Company which are submitted to shareholders for a vote by poll. No class of shares confers on the holder thereof any preferential or preemptive rights or any rights to participate in the profits and dividends of any other share class or any voting rights in relation to matters relating solely to any other share class. Any resolution to alter the class rights of the shares requires the approval of three quarters of the holders of the shares represented or present and voting at a general meeting of the class. The quorum for any general meeting of the class convened to consider any alteration to the class rights of the shares shall be such number of shareholders being two or more persons whose holdings comprise one third of the shares. Each of the shares other than subscriber shares entitles the shareholder to participate equally on a pro-rata basis in the dividends and net assets of the sub-fund in respect of which the shares have been issued, save in the case of dividends declared prior to becoming a shareholder. Subscriber shares entitle the shareholders holding them to attend and vote at all general meetings of the Company but do not entitle the holders to participate in the dividends or net assets of the Company. Composition and operation of the Board and Committees There are six Directors currently, three of whom are employees of companies within the EFG group of companies, two of whom are independent non-executive Irish resident Directors and finally Frank Connolly, who is a non-executive Director. The Articles of Association do not provide for retirement of Directors by rotation. However, the Board may be removed by the shareholders by ordinary resolution in accordance with the procedures established under the Companies Act, 2014 (as amended). Currently the Board meets at least quarterly. There are no standing sub-committees of the Board. However sub committees of a minimum of two Directors can convene on an ad hoc basis if required to do so. Given the contractual obligations on the Administrator, the Board has concluded that there is currently no need for the Company to have a separate internal audit function in order for the Board to perform effective monitoring and oversight of the internal control and risk management systems of the Company in relation to the financial reporting process. 6

8 Directors Report (continued) Transactions with Connected Parties The Central Bank s Alternative Investment Fund ( AIF ) Rulebook section on Dealings by management company, general partner, depositary, AIFM, investment manager or by delegates or group companies of these states that an AIF should only enter into a transaction with a management company, general partner, depositary, AIFM, investment manager or by delegates or group companies of these, where it is negotiated at arm's length. Transactions must be in the best interests of the shareholders. The Board is satisfied that there are arrangements (evidenced by written procedures) in place to ensure that the obligations set out in paragraph 1 of section 1, VII of the AIF Rulebook are applied to all transactions with connected parties, and the Board is satisfied that transactions with connected parties entered into during the year complied with the obligations set out in this paragraph. Independent Auditors The Independent Auditors, PricewaterhouseCoopers, have indicated their willingness to remain in office in accordance with Section 383(2) of the Companies Act, 2014 (as amended). Events since the Financial Year End There have been no significant events affecting the Company since the financial year end. Audit Information Statement As per the Section 330 of the Companies Act 2014(as amended), - so far as the Directors are aware, there is no relevant audit information of which the company s statutory auditors are unaware; and - the Directors have taken all the steps that they ought to have taken as Directors in order to make themselves aware of any relevant audit information and to establish that the company s statutory auditors are aware of that information. On behalf of the Board John Hamrock Director Karl McEneff Director Date: 20 October

9 Investment Objectives The investment objectives of each sub-fund are set out below. New Capital Multi-Hedge Focus Fund The investment objective of the sub-fund is to seek to maximise capital returns, by employing a diversified multi-manager fund framework. The sub-fund focuses on collective investment schemes, which are either closed to new investors or hard to access for a traditional investor due to liquidity issues. New Capital Tactical Opportunities Fund The investment objective of the sub-fund is to achieve maximum capital appreciation through investment in global financial markets. 8

10 New Capital Multi-Hedge Focus Fund Commentary The last accounting year (i.e. 1 July 2016 to 30 June 2017) has been a very important one for the New Capital Multi-Hedge Focus Fund. First, the name of the Fund was modified to reflect better the new strategy adopted by the fund management team as we embarked into a complete reshuffle of the portfolio. We experienced a large reduction of assets under management driven by the redemption of one of our anchor and historical investors. His decision was driven by tax reasons and repatriation of capital into EU regulated structures. As the fund held positions in a handful of closed funds with a great track record we decided not to redeem them and hence concentrate the portfolio around these positions. As a consequence, we had to amend the prospectus in order to loosen up the investment constraints to accommodate this new approach. This resulted in transitioning from a highly diversified portfolio into a more concentrated portfolio of high conviction and hard to access investment vehicles. The impact in terms of future expected performance is clearly a higher expected return accompanied by higher volatility. VR Capital allocation of around 23%. VR is active in distressed securities with a strong orientation towards emerging markets. The fund annualized north of 20% over 15 years. As eluded to above, these three funds are not accepting new subscriptions. In conclusion, a lot of changes have occurred during the year under review. We are very positive about the new direction being taken by the Fund and we expect this to be a very successful investment opportunity for existing investors. EFG Asset Management Switzerland Date: 13 September 2017 The realized performance over the last twelve months clearly reflects that. Indeed, the rolling 12-months performance and volatility have both increased accordingly. The Fund s return from July 2016 to June 2017 was close to 6.5% net of all fees, which compares favourably with respect to main hedge fund indices. Indeed, the HFRX Global Hedge Funds Index, the HFRI Fund of Funds Index and the Credit Suisse Hedge Funds Index were up by 6.21%, 5.92% and 5.74% respectively. Another consequence of the above changes is that the Fund will not be able to accept new investments as long as the underlying funds remain closed. Hence, going forward as and when an opportunity arises, we will re-open the Fund selectively giving the priority to existing investors as well as the most sophisticated relationships we have within the EFG network. Finally, the liquidity of the Fund had to be modified as well. It moved from being monthly with 30 days notice to quarterly still keeping the 30 days notice. The portfolio as of 30 June 2017 was composed of mainly three large positions, i.e. Elliott International Limited, Millennium International Limited and VR Global O/S Fund: Paul Singer s Elliott International Limited Fund-allocation of around 30%. Elliott is the pioneer of distressed debt investing and activism. The fund annualized close to 13% over the last 15 years with just one down year. Izzy Englander s Millennium International Limited Fundallocation of around 30%. Millennium developed and invented the multi-trader platform model as we know it with an outstanding track record of more than 20 years annualizing at 15%. 9

11 New Capital Multi-Hedge Focus Fund Portfolio Statement as at 30 June 2017 Holdings Description Fair value % of sub-fund Collective Investment Scheme United States (2016: 28.17%) 6,752 Elliott International Limited 8,395, VR Global O/S Fund 6,012, JCAM Global Fund* 14, ,422, Cayman Islands (2016: 33.81%) 6,123 Millennium International Limited 12,311, ,311, Ireland (2016: 14.82%) 8,029 New Capital All Weather UCITS Fund 930, Bennelong Asia Pacific Multi Strategy S** 40, , Luxembourg (2016: Nil) 4,372 Schroder GAIA Fund 733, , British Virgin Islands (2016: 11.14%) Bahamas (2016: 4.15%) Bermuda (2016: 5.58% ) 4,826 Millenium Global Emerging Fund* Channel Islands (2016: Nil) 66 Absolute Return Europe Fund * Absolute Return Europe Fund EUR* Total Collective Investment Scheme 28,438, Structured Note Switzerland (2016: 1.43%) *A Liquidating fund **Side-pocket holding 10

12 New Capital Multi-Hedge Focus Fund Portfolio Statement as at 30 June 2017 (continued) Forward Foreign Exchange Currency Contracts*** Purchase Currency Contractual Amount Sale currency Contractual amount Unrealised gain/(loss) % of sub-fund Maturity date Amounts receivable (2016: 0.00%)*** EUR 4,000,000 4,558,800 7/25/2017 8, EUR 1,884,283 2,121,516 7/14/ , EUR 6,105 6,801 7/14/ GBP 32,904 42,647 7/14/ GBP /14/ Unrealised gain on forward foreign exchange currency contracts 37, Purchase Currency Contractual Amount Amounts payable (2016: 0.19%)*** Sale currency Contractual amount Maturity date Unrealised gain/(loss) % of sub-fund EUR 5,200,000 5,684,640 7/25/2017 (252,963) (0.89) Unrealised loss on forward foreign exchange currency contracts (252,963) (0.89) ***The counterparties for the outstanding forward foreign exchange currency contracts are HSBC Bank PLC and Bank of America. Total Investment at fair value - assets 28,476, Total Investment at fair value - liabilities (252,963) (0.89) Net investments at fair value 28,223, Net current assets 85, Net assets attributable to redeemable participating shareholders 28,309,

13 New Capital Multi-Hedge Focus Fund Portfolio Changes (Unaudited) Cost in Purchases 000s Millennium International Limited 12,034 New Capital All Weather UCITS 8,551 Schroders Gaia Egerton 667 VR Global O/S Fund 312 Candlewood Structured Credit Harvest Fund 84 Total Purchases 21,648 Proceeds in Sales 000s Millennium International Limited 12,034 New Capital All Weather UCITS 7,878 Egerton Long Short Fund 6,930 Lyxor/Bridgewater B 4,517 Nektar (Bermuda) C 3,939 Candlewood Structured Credit Harvest Fund 3,810 Atlas Enhanced Fund Limited 3,618 Boussard & Gavaudan Holding Limited 3,598 Macrosynergy Trading Fund 3,498 Moore Macro Managers Fund 2,910 JABCAP EMEA Fund X 2,886 Cassiopeia UCITS 2,448 SPM Opportunity Offshore Fund A 2,403 Mojna Alpha Fund Ltd Usd 2,241 Canyon Balanced (Cayman) B 1,972 GAM Global Rates Hedge Fund 1,437 Crabel Fund 1,098 VR Global O/S Fund 312 Bennelong Asia Pacific Multi Strategy S* 6 Total Sales 67,535 * Side-pocket holding The Unaudited Statement of Significant Purchases and Sales reflect the aggregate purchases of a security exceeding one percent of the total value of purchases and aggregate disposals of a security greater than one percent of the total sales for the year. At a minimum the largest 20 purchases and largest 20 sales must be given. The above list consists of all purchases and sales transactions for the year. 12

14 New Capital Tactical Opportunities Fund Commentary Over the past 12-months to end June 2017, the fund was up 38% versus the MSCI World (Hedged to ) of 17%. For the year to date, the fund was up 14% versus the 7% for MSCI World (Hedged). The key sector driver to the funds returns over the past 12-months, were Information Technology and Industrials, both were up 32% and 66% respectively, on the downside Consumer Discretionary was a negative contributor as a result of the continued fears over the total domination of Amazon. Within technology our key themes of Artificial Intelligence and Electric Vehicles were positive although Cloud was positive but under-performing. The key stocks within these sectors, such as Nvidia (+209%), Micron Technology (+117%) and TSLA (+70%) were the out-sized gainers and companies such as Work-Day (+30%) and Splunk (+5%), which are cloud or big data enablers were behind, principally due to valuation concerns. Within the industrials, stock selection was particularly strong as Airlines in American (+80%), United (+83%) and Delta (+50%) benefitted from stronger trends following a period of poor performance and of course, the investment from Warren Buffett which brought investing into airlines back into the mainstream. Also within sector trends, Terex was up 87% over the 12-month period. What is encouraging, is that many of these names we have owned for many years. In terms, of newer positions, the consumer discretionary sector (ex-amazon) has been particularly poor over the last 3-4 years, and our view is that some brands like Coach (+20%) or Abercrombie & Fitch (-26%) will still be survivors and will benefit from a re-focus to an omni-channel existence which they have been slow to adopt. Looking forward, the market environment remains conducive to investing in our concentrated style especially as the global economy continues to show positive trends and the interest rate environment remains relatively benign. EFG Asset Management (UK) Limited, London Date: 13 September

15 New Capital Tactical Opportunities Fund Portfolio Statement as at 30 June 2017 Holdings Description Fair value % of sub-fund Equities* United States (2016: 87.09%) 104,803 Micron Technology 3,129, ,494 United Continental Holdings 2,821, ,362 Workday 2,750, ,220 Coach 2,614, ,566 Box 2,581, ,260 American Airlines Group 2,529, ,013 Terex 2,362, ,250 Ubiquiti Networks 2,350, ,000 Skechers 2,330, ,400 Tesla Motors 2,315, ,000 Xcerra 2,304, ,187 Splunk 2,286, ,000 Shake Shack 1,884, ,500 Office Depot 1,873, ,390 L Brands 1,853, ,063 Delta Air Lines 1,723, ,900 Abercrombie & Fitch 1,691, ,560 Southwest Airlines 1,650, ,185 Synaptics 1,612, ,800 Fossil Group 1,466, ,347 Manitowoc 1,365, ,140 Biomarin 1,193, ,413 NVIDIA 926, ,619, Netherlands (2016: 9.56%) China (2016: 7.80%) 184,500 BYD 1,132, ,000 Anhui Conch Cement 1,086, ,000 TravelSky Technology Limited 906, ,200 Leju Holdings 312, ,886,000 Hanhua Financial Holdings 249, ,875,000 China Hongxing Sports** - - 3,687, Hong Kong (2016: 7.65%) 1,666,000 Lenovo 1,053, ,000 China Everbright International 610, ,663, Cayman Islands (2016: Nil) 3,580 NetEase 1,076, * By country of quotation ** Dealing suspended 1,076,

16 New Capital Tactical Opportunities Fund Portfolio Statement 30 June 2017 (continued) Holdings Description Fair value % of sub-fund Canada (2016: Nil) 22,900 Canada Goose Holdings 452, , Total Equities* 54,498, * By country of quotation Futures** Hong Kong (2016: 0.38%) 65 H-Shares Index Futures (HKD) July , Total Futures Assets** 7, Futures Japan (2016: (0.54%)) 30 Nikkei 225 Futures (OSE) September 2017 (21,360) (0.04) Total Futures liability** (13,450) (0.02) **The Counterparty for the outstanding futures is Morgan Stanley Forward Foreign Exchange Currency Contracts*** Purchase Currency Contractual Amount Sale currency Contractual amount Maturity date Unrealised gain % of sub-fund Amounts receivable (2016: 0.02%)*** GBP 830,480 1,076,387 14/07/2017 EUR 6,689,488 7,531,702 14/07/2017 Unrealised gain on forward foreign exchange currency contracts 2, , , Purchase Currency Contractual Amount Sale currency Contractual amount Maturity date Unrealised gain % of sub-fund Amounts payable ( %) *** EUR 65,511 (73,390) 14/07/2017 (1,369) - Unrealised loss on forward foreign exchange currency contracts (1,369) - *** The counterparty for the outstanding forward foreign exchange currency contracts is HSBC Bank Plc. 15

17 New Capital Tactical Opportunities Fund Portfolio Statement 30 June 2017 (continued) Description Fair value % of sub-fund Total Investments at fair value assets 54,611, Total Investments at fair value liabilities (22,729) (0.04) Net Investments at fair value 54,588, Net current liabilities (5,252,057) (10.65) Net assets at attributable to redeemable participating shareholders 49,336,

18 New Capital Tactical Opportunities Fund Portfolio Changes (Unaudited) Cost in Purchases 000s Fossil Group 3,182 Limited Brands Inc 2,293 Skechers USA Inc 2,057 Abercrombie & Fitch 1,938 NVIDIA 1,388 Southwest Airlines 1,339 Biomarin 1,234 BYD 1,069 NetEase 1,015 Anhui Conch Cement 961 Allegiant 926 Synaptics 753 Palo Alto Networks 721 TravelSky Technology 674 Lululemon Athletica 581 Shake Shack 538 Coach 508 Canada Goose Holdings 506 Lenovo 495 Office Depot 471 Delta Air Lines 417 Tesla Motors 341 American Airlines Group 339 Manitowoc Company 276 Total Purchases 24,022 Proceeds in Sales 000s NVIDIA 3,518 Mobileye 3,137 Micron Technology 2,808 Lululemon Athletica 2,600 NXP Semiconductors 2,499 Palo Alto Networks 2,156 Joy Global 2,110 Kate Spade & Company 1,753 United Continental Holdings 1,746 Terex 1,533 New China Life Insurance Company 1,264 Sinotrans 912 Huatai Secutiries 900 Allegiant Travel 891 Ubiquiti Networks 885 Delta Air Lines 853 Synaptics 846 Splunk 830 China High Speed Transmission 820 Xcerra 760 American Airlines Group 715 Tesla Motors 708 Box 691 Shenzhen International Holdings Ltd 599 Ctrip.com International, Ltd (ADR) 519 Total Sales 36,053 The Unaudited Statement of Significant Purchases and Sales reflect the aggregate purchases of a security exceeding one percent of the total value of purchases and aggregate disposals of a security greater than one percent of the total sales for the year. At a minimum the largest 20 purchases and largest 20 sales must be given. The full listing of the portfolio changes for the year is available, upon request, at no extra cost from the Administrator. 17

19 Statement of Net Assets As at 30 June 2017 Current assets New New New New New New Capital Capital Capital Capital Capital Capital Mult-Hedge Mult-Hedge Tactical Tactical Alternative Alternative Focus Focus Opportunities Opportunities Strategies plc Strategies plc Fund Fund Fund Fund Notes 30 June 30 June 30 June 30 June 30 June 30 June Debtors 12 56,187 2,655,991-2,559,648 56,187 96,343 Cash at bank 13 7,535,436 6,867,417 7,535,436 6,867, Margin Cash 13 1,005,162 1,713, ,005,162 1,713,124 Financial assets at fair value through profit or loss 3 83,087, ,137,335 28,476,361 69,066,785 54,611,048 53,070,550 Total current assets 91,684, ,373,867 36,011,797 78,493,850 55,672,397 54,880,017 Current liabilities Financial liabilities at fair through profit or loss 3 (275,692) (607,693) (252,963) (130,028) (22,729) (477,665) Bank overdraft 13 (5,265,184) (6,644,652) - (6,344) (5,265,184) (6,638,308) Margin Cash 13 (546,000) (391,177) - - (546,000) (391,177) Creditors 14 (7,951,918) (8,867,041) (7,449,696) (8,660,799) (502,222) (206,242) Total current liabilities (excluding net assets attributable to redeemable participating shareholders) (14,038,794) (16,510,563) (7,702,659) (8,797,171) (6,336,135) (7,713,392) Net assets attributable to redeemable participating shareholders 77,645, ,863,304 28,309,138 69,696,679 49,336,262 47,166,625 On behalf of the Board John Hamrock Director Karl McEneff Director Date: 20 October 2017 The accompanying notes form an integral part of these financial statements. 18

20 Statement of Operations For the financial year ended 30 June 2017 Income New New New New New New Capital Capital Capital Capital Capital Capital Mult-Hedge Mult-Hedge Tactical Tactical Alternative Alternative Focus Focus Opportunities Opportunities Strategies plc Strategies plc Fund Fund Fund Fund Notes 30 June 30 June 30 June 30 June 30 June 30 June Gross dividends 2 468, , , ,346 Other Income 27,294 5,217 14,678 3,198 12,616 2,019 Net gains/(losses) on investments and foreign currency 4 20,568,197 (17,373,737) 3,947,793 (3,348,929) 16,620,404 (14,024,808) Total investment gain/(loss) 21,063,507 (16,965,174) 3,962,471 (3,345,731) 17,101,036 (13,619,443) Expenses Management fee 6 1,242,385 1,501, , , , ,341 Administration fee 8 106, ,185 59,448 70,201 47,008 60,984 Depositary fee 9 51,397 77,530 24,490 37,809 26,907 39,721 Trustee fee 19,164 25,722 9,415 15,124 9,749 10,598 Other expenses 257, , , , , ,549 Total operating expenses 1,677,296 2,037, ,899 1,071, , ,193 Operating gain/(loss) 19,386,211 (19,002,877) 3,143,572 (4,417,241) 16,242,639 (14,585,636) Finance costs Interest expenses 2 141, ,508 30,382 2, , ,429 Total finance costs 141, ,508 30,382 2, , ,429 Gain/(loss) before tax 19,245,145 (19,106,385) 3,113,190 (4,419,320) 16,131,955 (14,687,065) Withholding tax 2 102,305 61, ,305 61,067 Increase/(decrease) in net assets from operations attributable to redeemable participating shareholders 19,142,840 (19,167,452) 3,113,190 (4,419,320) 16,029,650 (14,748,132) All amounts above relate to continuing operations. The accompanying notes form an integral part of these financial statements. There are no recognised gains or losses arising in the year, other than those dealt with in the income statement. In arriving at the results of the financial year, all amounts relate to continuing operations. 19

21 Statement of Changes in Net Assets Attributable to Redeemable Participating Shareholders For the financial year ended 30 June 2017 New New New New New New Capital Capital Capital Capital Capital Capital Multi-Hedge Multi-Hedge Tactical Tactical Alternative Alternative Focus Focus Opportunities Opportunities Strategies plc Strategies plc Fund Fund Funds Funds 30 June 30 June 30 June 30 June 30 June 30 June Net assets attributable to redeemable participating shareholders at start of financial year 116,863, ,188,881 69,696,679 64,033,791 47,166,625 63,155,090 Share transactions Proceeds from redeemable participating shares issued 5,890,000 44,782,013 2,490,000 39,283,232 3,400,000 5,498,781 Cost of redeemable participating shares redeemed (64,250,744) (35,940,138) (46,990,731) (29,201,024) (17,260,013) (6,739,114) (58,360,744) 8,841,875 (44,500,731) 10,082,208 (13,860,013) (1,240,333) Increase/(decrease) in assets from operations attributable to redeemable participating shareholders from operations 19,142,840 (19,167,452) 3,113,190 (4,419,320) 16,029,650 (14,748,132) Net assets attributable to redeemable participating shareholders at end of financial year 77,645, ,863,304 28,309,138 69,696,679 49,336,262 47,166,625 The accompanying notes form an integral part of these financial statements. 20

22 Notes to the Financial Statements 1. General New Capital Alternative Strategies plc (the Company ) was incorporated under the laws of the Republic of Ireland as an investment company with variable capital, registered number , on 24 July The Company is authorised by the Central Bank of Ireland pursuant to the provision of Part 24 of the Companies Act, 2014 (as amended). The Company is an umbrella fund with segregated liability between sub-funds. Accordingly any liability incurred on behalf of or attributable to any sub-fund of the Company shall be discharged solely out of the assets of the sub-fund, and neither the Company nor any director, receiver, examiner, liquidator, provisional liquidator or other person shall apply, nor be obliged to apply the assets of any such sub-fund in satisfaction of any liability incurred on behalf of or attributable to any other sub-funds of the Company irrespective of when such liability was incurred. The sub-funds of the Company as at 30 June 2017 are as follows: Fund Name New Capital Multi-Hedge Focus Fund (Formerly known as New Capital All Weather Fund) New Capital Tactical Opportunities Fund Functional Currency US dollar US dollar The Alternative Investment Fund Manager ( AIFM ) has appointed EFG Asset Management (Switzerland) SA as the investment manager ( The Investment Manager ) for New Capital Multi-Hedge Focus Fund on 18 April, The Investment Manager has an asset management licence and is subject to supervision by Swiss Financial Market Supervisory Authority ( FINMA ) in Switzerland. EFG Asset Management (UK) Limited is authorised to act as the AIFM of Alternative Investment Funds ( AIF s), including acting as the AIFM of the Company. The AIFM has in good faith and in the interests of the shareholders delegated certain activities to third party service providers. Any delegation employed by the AIFM is based on objective reasons, taking into account the following criteria: (a) optimising business functions and processes; (b) cost savings; (c) the expertise of the delegate(s) in administration or in specific markets or investments; (d) the access of the delegate(s) to global trading capabilities; and/or (e) other considerations. The structure ensures (through effective monitoring and supervision and oversight and responsibilities retained by the AIFM) that delegation does not result in an avoidance of the AIFM s responsibilities or liabilities. Under the AIFMD rules, the AIFM has certain responsibilities in relation to the proper and independent valuation of the Company s assets and the calculation and publication of the Net Asset Value (the NAV ) and the Net Asset Value per Share (the NAVPS ). The Company has appointed the AIFM to be responsible for (i) the proper valuation of the Company s assets, (ii) the calculation of the NAV of the Company and the net assets and NAVPS of each Class and (iii) publication of the NAV of the Company and the NAVPS of each class. The Company has, in consultation with the AIFM appointed HSBC Securities Services (Ireland) DAC (the Administrator ) to calculate and publish the NAV of the Company and, the net assets and the NAVPS of each Class, in each case in accordance with the valuation policy of the Company. 2. Significant Accounting Policies 2.1 Basis of Preparation The financial statements have been prepared on a going concern basis and in accordance with the Companies Act, 2014 (as amended) and Generally Accepted Accounting Practice in Ireland including the Financial Reporting Standard ( FRS ) applicable in the UK and Republic of Ireland ( FRS 102 ) (accounting standards issued by the Financial Reporting Council and promulgated by the Institute of Chartered Accountants in Ireland). The format and certain wording of the financial statements have been adapted from that contained in the Act and FRS 3 Reporting Financial Performance so that, in the opinion of the Directors, they more appropriately reflect the Company s business as an investment fund. The Profit and Loss Account is referred to as the Statement of Operations and the Balance Sheet is referred to as the Statement of Net Assets. The information required by FRS 3, Reporting Financial Performance, to be included in a Statement of Total Recognised Gains and Losses and a Reconciliation of Movements in Shareholders Funds is, in the opinion of the Directors, contained in the Statement of Operations and the Statement of Changes in Net Assets Attributable to Redeemable Participating Shareholders on page 20. In accordance with Section 3.3 of the Companies Act 2014, (as amended) Directors confirm that the Company s financial statements have been prepared in compliance with FRS 102 for the year ended 30 June The Company meets all the conditions set out in FRS 102, Section 7, and consequently has availed of the exemption available to certain funds not to prepare a statement of cash flows. 2.2 Critical judgements in applying accounting policies and key sources of estimation uncertainty The preparation of these financial statements requires management to make judgements, estimates and assumptions that affect the application of policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates and these differences could be material. The key judgement relates to the selection of the classification of investments and the associated valuation policy. All investments have been classified at fair value through profit or loss, and are measured at fair value. Further information on the risks related to the investments is included in note

23 Notes to the Financial Statements (continued) 2.3 Principal Accounting Policies The principal accounting policies applied in the preparation of the financial statements of the Company are set out below. Historical cost convention The financial statements have been prepared under the historical cost convention as modified by the revaluation of financial assets and financial liabilities held at fair value through profit or loss. Foreign exchange translation (a) Functional currency The Company and its sub-funds have adopted the US dollar as their functional currency as it most appropriately reflects the economic environment in which the Company operates. Amounts of the individual sub-funds in overseas currencies are translated for the purpose of the aggregation as follows: (i) Using average (as an approximation of actual) monthly exchange rates in the Statement of Operations. (ii) Using average (as an approximation of actual) rate ruling on the date of the transaction in the Statement of Changes in Net Assets Attributable to Redeemable Participating Shareholders for the movement due to issue and redemption of shares. (iii) Using year end exchange rates in the Statement of Net Assets. (b) Transactions and balances Foreign currency transactions are translated into the functional currency of the individual sub-funds using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year end rates of monetary assets and liabilities denominated in foreign currencies are recognised in the Statement of Operations, within the net fair value gains/(losses) on investments and foreign currency. Financial assets and liabilities at fair value through profit or loss (a) Classification The Company classifies its investments in Collective Investment Schemes, equity securities, debt securities, futures and forward foreign currency contracts, as financial assets or financial liabilities at fair value through profit or loss. Financial assets and financial liabilities designated at fair value through profit or loss at inception are those that are managed and whose performance is evaluated on a fair value basis. (b) Recognition/derecognition Purchases and sales of investments are recognised on the trade date the date on which a Company commits to purchase or sell the investment. Investments are derecognised when the rights to receive cash flows from the investments have expired or the Company has transferred substantially all risks and rewards of ownership. Realised gains and losses on disposals of financial assets and financial liabilities classified as fair value through profit or loss' are calculated using the average cost and accounted for in the Statement of Operations. (c) Measurement Financial assets and financial liabilities at fair value through profit or loss are initially recognised at cost and the transaction costs which are separately identifiable included in the net fair value gain/(loss) on financial assets at fair value through profit or loss in the Statement of Operations. Subsequent to initial recognition, all financial assets and financial liabilities at fair value through profit or loss are measured at fair value. Gains and losses arising from changes in the fair value of the financial assets or financial liabilities at fair value through profit or loss category are presented in the Statement of Operations in the financial year in which they arise. Financial instruments were valued at middle price on the 30 June 2017, the last business day of the financial year, in accordance with the Company s Prospectus. (d) Fair value estimation Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. As a result of the Company's decision to implement the recognition and measurement provisions of IAS 39 - Financial Instruments: Recognition and Measurement, the fair value of financial assets and liabilities traded in active markets (such as publicly traded securities and derivatives) is based on quoted market prices at the close of trading on the reporting date. The fair value of financial instruments traded in active markets (such as publicly traded derivatives and trading securities) is based on quoted market prices at the balance sheet date. The quoted market price used for financial assets and financial liabilities held by the Company is the current mid price. When the Company holds derivatives with offsetting market risks it uses mid-market prices as a basis for establishing fair values for the offsetting risk positions and applies the bid or asking price to the net open position, as appropriate. The fair value of investments made by the Company in investment funds is based on the unaudited Net Asset Value per share or unit quoted by the administrator of the Collective Investment Scheme in question as at the close of business on the valuation day, or the last quoted unaudited Net Asset Value available in the preceding month. The Company uses the last traded market price to value investments where the mid price falls within the bid-ask spread. 22