Altern Asset Opps Ld (TLI) - Interim Management Statement RNS Number : 4877R Alternative Asset Opps PCC Ltd 19 November 2012 19 November 2012 Alternative Asset Opportunities PCC Limited (the "Company") Interim Management Statement This interim management statement relates to the period from 1 July 2012 to the date of publication of this statement and has been prepared solely to provide additional information in order to meet the relevant requirement of the UK Listing Authority's Disclosure and Transparency Rules, and should not be relied on by Shareholders, or any other party, for any other purpose. The Company is a closed-ended Guernsey registered protected cell company with one cell known as the US Traded Life Interests Fund (the "Fund"). Investment objective The Company's investment objective in respect of the Fund is to provide investors with an attractive capital return through investment predominantly in a diversified portfolio of US Traded Life Interests ("TLIs"). Financial position and performance Over the period to 31 October 2012, the Company's net asset value per share decreased by 5.8% to 76.5 pence. As at 31 October 2012, the shares were trading at a 28% discount to the adjusted net asset value. If the Company was to recognise at 31 October 2012 the recent placing and open offer (the "Placing and Open Offer"), which raised £9,746,000 net of expenses, this would result in an adjusted net asset value on a pro-forma basis of 56.0 pence per share. Three policy maturities on two lives were identified during the period. The gains from the policy maturities were recognised in the 31 October 2012 NAV adding circa 1.7 pence to the unadjusted NAV per share. There have been, in aggregate, 41 policy maturities since the Fund's inception. The Company's loan agreement with Allied Irish Banks plc was due to expire on 28 September 2012. As announced on 10 September 2012, the loan agreement was renewed until 28 March 2013 providing a facility of US$23.2 million. The Company subsequently negotiated an amendment to the loan agreement of an increased amount of US$24.2 million for the period to 31 March 2014, subject to the Fund raising at least US$10 million (net of expenses) from shareholders and the net proceeds being used to reduce the net borrowings of the Fund. A new amendment to the loan agreement was duly signed on 1 November 2012. As at 19 November 2012, following repayment of the net proceeds of the Placing and Open Offer of US$15.6 million and the above maturity proceeds, total borrowings under the agreement had fallen to US$238,906. At an Extraordinary General Meeting on 1 November 2012 it was resolved to approve a Placing and Open Offer of up to 32,000,000 new shares in respect of the Fund at a price of 32 pence per share. On 5 November 2012 32,000,000 new shares were admitted to the Official List of the UK Listing Authority and admitted to trading on the London Stock Exchange's main market for listed securities, raising gross proceeds of approximately £10.2 million. There are now 72,000,000 Redeemable Participating Preference Shares in issue. At the same Extraordinary General Meeting on 1 November 2012 it was also resolved to amend the Company's Articles of Incorporation to include pre-emption rights and to approve the participation in the lacing by Investec Asset Management Limited, a related party of the Company. At the Annual General Meeting held on 14 November 2012 an ordinary resolution was passed to approve the continuance of the US Traded Life Interests Fund of the Company until the Annual General Meeting to be held in 2013. The Board is not aware of any other material events during the period from 1 July 2012 to 31 October 2012, or in the period from 1 November 2012 to the date of this announcement, which would have had a material impact on the financial position of the Company. As in previous reports, the simplified illustrative 'Sensitivity Matrix' set out below is expressed in terms of NAV per share and enables the Board to show the effect of differing market IRR assumptions. - The first line of NAVs in the table uses the 'Latest LE' assumption, that is to say either an LE based on a recently updated assessment obtained on or after 1 January 2011 or, for the remaining 34% of the portfolio by face value (the 'non-updated policies'), either the original LE assessed at the time of purchase or an LE updated before 31 December 2010. The average LE is shown for reference (4.7 years). NAV is then shown at four different discount rates, ranging from 10% to 20%. This shows the effect of IRR on current value, but it also allows investors to assess the effects of forced sales. - The second line uses the assumption that updated LEs obtained for the non-updated polices would broadly follow those already obtained for other policies, resulting in an LE increase of 10% on the non-updated policies. In practice, the LE changes exhibited by actual revised assessments vary widely and the Board does not feel it is necessarily correct to extrapolate the changes for the non-updated policies. The overall effect is to increase average LE by 0.1 years. - The third line assumes an increase in LE of 20% on the non-updated policies. The effect on NAV is roughly similar to that shown in the second line with an incremental increase in LE of 0.2 years. - Finally, the fourth line shows the outcome of assuming LEs are simply based on the current table of life expectancies for the general population, the 2008 Valuation Basic Table (Ultimate), i.e. ignoring LE assessments. The Board does not suggest that this is a realistic assumption, but it gives a measure of the degree to which the portfolio is dependent on assessed LEs being shorter than for the population as a whole. Sensitivity Matrix Net Asset Value in pence per share on various assumptions as at 31 October 2012, unadjusted for the recent Placing and Open Offer Weighted Average Discount Rates applied to cash Mortality Assumptions LE flows 10% Current (12%) 16% 20% Latest LE 4.7 82.9 76.5 65.8 57.2 +10% for LE dates before 4.8 78.7 72.4 61.9 53.6 01/01/2011 +20% for LE dates before 5.0 74.8 68.7 58.4 50.3 01/01/2011 No underwriting 5.3 68.6 62.1 51.5 43.2 Source: SL Investment Management Limited Top ten holdings By reference to the most recent portfolio valuation of the Company as at 31 October 2012, the largest ten investments held by the Company, measured by life office exposure, were as follows: % of total assets as at Issuer Number of policies 31 October 2012 American General Life Insurance Company 12 22.50% (TX) Lincoln National Life Insurance Co 14 18.13% Transamerica Life Insurance Company 19 15.65% John Hancock Life Insurance Company 9 5.84% Massachusetts Mutual Life Insurance Co 5 5.58% MetLife Insurance Company of Connecticut 6 4.50% Security Life of Denver Insurance Co 1 4.37% Aviva Life and Annuity Company of NY 4 3.98% New York Life Insurance and Annuity Corp 5 3.46% Pacific Life Insurance Company 4 2.70% Company Information Launch date 25 March 2004 EPIC TLI Year end 30 June Report & Accounts 2012 Annual Report posted October, Half-yearly posted February AGM November Price Information Financial Times (under INVESTMENT COMPANIES, listed as 'AltAstsOpps.') Investor Information The latest available portfolio information included in the interim and annual report and accounts can be accessed via http://www.rcm.com/investmenttrusts/investors_tlif.php (under the Professional Investors section). By order of the Board Alternative Asset Opportunities PCC Limited Enquiries: Peter Ingram Company Secretary Tel: 020 7065 1467 This information is provided by RNS The company news service from the London Stock Exchange END IMSGGGGPGUPPGQB -0- Nov/19/2012 16:22 GMT
Altern Asset Opps Ld TLI Interim Management Statement
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