The Core Wealth Fund Growth in Transition Economies. 31 st October 2018

Transcription

1 The Core Wealth Fund Growth in Transition Economies 31 st October 2018

2 What we do We produce long-term asset growth in transition economies The Core Wealth Fund searches for misunderstood value opportunities predominantly in Central and Eastern Europe. We favour defensive, high-yielding stocks and bonds. Cuban trade finance adds more yield and keeps us on the lookout for more profitable investments there should transition occur. The result is a balanced and ungeared portfolio of equities and fixed income in countries where risk is falling but growth is strong LISBON 1

3 What we come from Richard Wood founded Wood & Company; the Prague-based investment bank in 1991 Vladimír Jaroš currently serves as its CEO. The firm s reputation and understanding of opportunities in Europe s new market economies make it an important ally for our fund. William White brings decades of success in Cuba and Latam but also brings structuring and government finance expertise that helps in our other countries. 2

4 Where we invest Higher Ground currently invests in LISBON 3

5 Why Transition Economies? There are many more emerging markets than there are Transition Economies...places where a shift in ideology creates seismic changes and a predictable re-ordering. We believe that the direction is clearer in Transition Economies and growth is stronger. 4

6 Performance Comparables PERFORMANCE: HIGHER GROUND CORE WEALTH FUND vs HEDGE FUND INDEX LISBON It is easy, looking back, to find hedge fund managers who would have outperformed us over any given period. The problem is, predicting which manager will do best in advance given that the average of all hedge fund returns is so weak. The Core Wealth Fund has produced steady gains for 10 years without significant setbacks. 5

7 Term Sheets Description of fund Open-ended, self-managed, professional investor fund incorporated in Malta as a sub-fund of Higher Ground SICAV plc and licensed by MFSA from April 8 th Liquidity Month end subscriptions/redemptions at NAV. 3 months notice for redemptions. Board of Directors and Investment Committee Richard Wood (Vancouver), Vladimir Jaros, (Prague), William White, (Havana), David Curmi and Michael Warrington, (Malta). for CV s. Investment Objective The investment objective is to provide its shareholders with capital preservation, limited volatility and long term capital appreciation from investments in transition economies. Investment Policy The Sub-Fund will generally invest in publicly-traded securities, other collective investment schemes and in cash and money market instruments. Classes of Shares EUR Class GBP Class USD Class Minimum Investment EUR100,000 or equivalent. Investment Management Fee 1% per annum of the Net Asset Value. Performance Fee 10% of gains with high water mark. Accrued monthly but paid out every 3 years. With equalization. Administrator Apex Fund Services Prime Broker Deutsche Bank Trust Company Americas Auditor PwC 6

8 Fastest growing countries in Europe 6% 5% 4% GDP Growth 3% 2% 1% 0% Czech Republic Hungary Poland European Union (28 countries) OECD - Total But Extreme politics. National populists run Poland and Hungary. Anti-immigrant billionaire as Prime Minister of the CR. January saw Romania s third PM in a year more about corruption than nationalism. Conversely Cuba s handover to Miguel Diaz-Canel - away from the popular nationalism of the Castro years. 7

9 Transition Economy Holdings Wizzair 3% Cash 6% Raiffeisen Bank 8% Cuban Trade Finance 41% Zavarovalnica Triglav 5% Cuba Wirtualna Polska 4% Kruk 5% CEE:Wide Czech Republic Romania Poland Slovenia Other 0.1% Cash 6.0% Value by asset class Em. Mkt. Equities 52.4% Prime Car Management 2% Romanian Privatisation Points 1% Transgaz 5% Cash Cuban Trade Finance 41.0% Em. Mkt. Fixed Income 0.6% Romgaz 4% Transelectrica 3% Fondul Proprietatea 6% 8

10 Attribution for CWF during financial year 17/18 7.0% 6.0% Em. Mkt. Equities Fondul Proprietatea Em. Mkt. Equities Societatea National Em. Mkt. Equities Transgaz Em. Mkt. Equities Transelectrica Em. Mkt. Equities Raiffeisen Bank Em. Mkt. Equities Prime Car Management Em. Mkt. Zavarovalnica Triglav Em. Mkt. Equities Wirtualna Polska Em. Mkt. Equities KRUK Em. Mkt. Equities Moneta Em. Mkt. Equities Wizz Air Fixed Income Ukrainian Bonds 6.32% Fixed Cuban Trade Finance Currency 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% -1.0% -2.0% 0.79% 0.69% -0.73% 0.58% 1.58% 0.82% -0.31% 0.16% -0.09% 0.49% -0.13% -3.0% -2.54% -2.20% 9

11 The Leadership Team Seasoned professionals in Transition Economies Richard Wood Board Member Investment Advisor Richard founded and led Wood & Company through postcommunist transition period to become the leading investment bank in CEE. Offices in Prague, Warsaw, London and others. Richard is the anchor investor and is in charge of asset allocation, structure and investor relations for Antillean fund. He is fluent in Spanish. William White Board Member Investment Advisor William served as the CEO of Republic Bank for 12 years, establishing the bank s Trade Finance business in Cuba. At Antillean, he is responsible for Asset allocation, regulation and deal decisions in Havana. William is a Chartered Management Accountant (UK) and holds an MBA from Wharton. He has lived and worked in Havana since He is a personal investor in Antillean Fund. 10

12 The Leadership Team Seasoned professionals in Transition Economies Michael Warrington Board Member Investment Committee Member Michael has held various senior positions with leading entities in Malta. He started his career with Bank of Valletta Plc, moving on to Airmalta Co Plc, and subsequently the AX Holdings Group of Companies. Until recently Michael was the Chief Executive Officer of Novum Bank Limited and a member of its board of directors. He has held board positions with GO plc and Malta Properties Plc and AX Investments Plc all of which are listed on the Malta Stock Exchange. He is currently the Chief Executive officer of the AX Holdings Group of Companies, a director of AX Investments plc, Forthnet A.E, Citadel Insurance plc, Nissan International Insurance Ltd and Valletta Cruise Port Plc. David Curmi Board Member Investment Committee Member David runs Curmi & Partners, a multi-generational fund management business in Malta. Before taking over from his father in 1995, he worked at James Capel in London. He holds a degree in Economics from Oxford Brookes University Vladimir Jaros Investment Committee Member Vladimir Jaros is the CEO of Wood & Co. In his 25 years at the firm, he came up through research but then worked for and eventually ran the firm s investment banking advisory business. That department has grown to be the leading regional investment bank, with landmark transactions such as the privatisations of ČSOB Bank, Czech Telecom, Slovak Telecom, Matav, (Hungarian Telecom), Globtel, and numerous capital markets transactions including the first ever Czech IPO; Zentiva and the largest ever mandatory buyout in the Czech Republic; Czech Telecom. Vladimir is a personal investor in the Antillean Fund and serves on its Investment Committee. 11

13 HIGHER GROUND CORE WEALTH FUND 31-October-2018 FUND INFORMATION INVESTMENT OBJECTIVE Fund Net Asset Value (Mn) 22.5 Capital preservation, limited volatility and long term capital Share Classes (base) / / $ appreciation from investments in transition economies. INVESTMENT RESULTS SINCE INCEPTION ANNUALIZED GAIN SHARPE RATIO SORTINO RATIO 7.28% Launch Price 100 on 4 May 2009 MONTHLY PERFORMANCE CLASS 100 on 1 June 2010 Year Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec $ 100 on 1 April % -1.13% -0.21% 0.19% -2.08% -0.88% 2.11% -0.94% -0.09% -1.78% % 1.55% 0.79% 0.88% 4.22% -2.46% 3.89% 1.28% -3.56% 1.43% 0.88% 0.43% % 1.31% 3.68% 1.05% -2.18% -1.10% 2.98% 2.25% 0.78% 1.42% -2.42% 0.74% NET ASSET VALUE % 3.85% -0.31% 3.03% -0.07% -1.42% 1.27% -4.34% -0.15% 6.31% -0.95% -3.06% EUR Class % 2.81% -0.61% -0.99% 1.85% 2.17% 0.30% 2.77% 1.43% 0.38% -2.89% -3.99% GBP Class % -0.05% 1.57% 2.02% 1.39% -4.54% 2.33% -0.37% 2.69% 4.38% 2.30% 0.67% USD Class % 1.97% 1.69% -0.21% -2.58% -2.36% 6.37% 0.16% 1.15% -1.62% -0.75% 1.66% % 2.01% -1.24% 1.52% -3.36% -2.43% 2.53% -1.08% -3.75% -0.11% 0.88% -0.20% INVESTMENTS % 0.82% 3.16% 3.20% -6.64% 0.43% 1.95% -0.23% 5.10% 4.07% -0.44% 5.79% Minima % -1.34% 2.25% 2.81% 4.10% -1.44% 3.61% 1.18% 75,000 $100,000 65,000 The US dollar and Sterling classes are hedged to produce the same percentage gains as the Euro class (shown) with the only divergence resulting from differences in interest rates. Charges Management: 1% Performance: 10% of returns for each 3 year period. With high water mark. Paid every 3 years. SERVICERS Investment Manager Higher Ground SICAV PLC Investment Advisors Richard Wood, William White Auditor PwC Custodian Deutsche Bank Trust Company Americas Administrator Apex Fund Services (Malta) Limited Legal Status Gains from the US dollar and Sterling classes therefore closely track the above. Full historical numbers available from Administrator. Monthly returns are % of value at start of month. YTD return is compounded monthly returns. Returns shown net of all fees. No mgmt fee before 7/2011. Past returns are not necessarily indicative of future performance. MONTHLY PERFORMANCE Professional Investor Fund licensed by DISTRIBUTION OF MONTHLY RETURNS ATTRIBUTION OF LAST MONTH'S RETURNS the Malta Financial Services Authority. 0.75% % INVESTMENTS Oct Sep 0.25% Cuban Trade Finance* 41.0% 39.7% Raiffeisen Bank (CEE) 7.5% 7.7% Kruk (Poland) 5.5% 6.0% Fondul Proprietatea (Romania) 5.7% 5.6% Zavarovalnica Triglav (Slovenia) 4.8% 5.0% Moneta Bank (Czech Republic) 4.8% 5.2% Transgaz (Romania) 4.7% 4.7% Romgaz (Romania) 4.5% 4.6% Wirtualna Polska (Poland) 3.9% 3.9% Wizz Air (CEE) 2.7% 3.1% Transelectrica (Romania) 2.8% 3.0% CEZ (Czech Republic) 2.2% 2.3% Prime Car Management (Poland) 1.9% 1.9% Romanian Privatisation Points 1.3% 1.3% TerraVia Convertible Bonds (USA/Brazil) 0.0% 0.7% Sub-prime RMBS (USA) 0.6% 0.5% Other 0.1% 0.1% VALUE BY ASSET CLASS Cash 6.0% 5.2% Total 100% 100% * from holding in Higher Ground Antillean Fund. No double fees. CURRENCIES Oct Sep Exposure not hedged back to fund currency RON 21.0% 21.1% PLN 11.3% 11.8% CZK 2.8% 2.8% Total 34% 35% Return (%) No. of months 6% 4% 2% 0% -2% -4% -6% -8% 31-May to Nov-09-6 to to May-10-4 to Nov-10-3 to to May-11-1 to - 2 Other 0.1% 30-Nov-11 0 to to 1 31-May-12 1 to 2 Returns (%) Cash 6.0% Cuban Trade Finance 41.0% 30-Nov-12 2 to 3 3 to 4 31-May-13 4 to 5 30-Nov-13 5 to 6 6 to 7 30-May-14 7 to 8 30-Nov May % -0.25% -0.50% -0.75% -1.00% -1.25% -1.50% -1.75% -2.00% -2.25% 30-Nov-15 Em. Mkt. Equities Em. Mkt. Equities 52.4% 31-May-16 Em. Mkt. Fixed Income 0.6% 30-Nov May Nov-17 Em. Mkt. Cuban Trade Fixed Income Finance YTD -1.83% 13.48% 3.27% 0.97% 1.87% 16.22% 5.97% -4.00% 15.61% 10.59% 31-May-18 Currency HIGHER GROUND SICAV PLC 171 OLD BAKERY STREET VALLETA VLT 1455 MALTA