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Friday 27 November, 2009

BH Global Limited

Monthly Shareholder Report

RNS Number : 1947D
BH Global Limited
27 November 2009
 


BH GLOBAL LIMITED

MONTHLY SHAREHOLDER REPORT

OCTOBER 2009


Important Legal Information and Disclaimer

BH Global Limited ("BHG") is a feeder fund to Brevan Howard Global Opportunities Master Fund Limited, which invests in a range of funds managed by Brevan Howard Offshore Management Limited. Brevan Howard Asset Management LLP ("BHAM") has supplied the following information regarding BH Global Limited's October 2009 performance and outlook. BHAM is authorised and regulated by the Financial Services Authority in the United kingdom. 

This material constitutes a financial promotion for the purposes of the Financial Services and Markets Act 2000 (the "Act") and the handbook of rules and guidance issued from time to time by the FSA (the "FSA Rules").

The material relating to BHG, and the underlying funds in which it invests, included in this report has been prepared by BHAM and is provided for information purposes only and does not constitute an invitation or offer to subscribe for or purchase shares in BHG. This material is not intended to provide a sufficient basis on which to make an investment decision. Information and opinions presented in this material relating to BHG, and the underlying funds in which it invests, have been obtained or derived from sources believed by BHAM to be reliable, but BHAM makes no representation as to their accuracy or completeness. Estimated results, performance or achievements may materially differ from any actual results, performance or achievements. Except as required by applicable law, BHG and BHAM expressly disclaim any obligations to update or revise such estimates to reflect any change in expectations, new information, subsequent events or otherwise. All investments are subject to risk. Prospective investors are advised to seek expert legal, financial, tax and other professional advice before making any investment decisions.

Tax treatment depends on the individual circumstances of each investor in BHG and may be subject to change in future. Returns may increase or decrease as a result of currency fluctuations.

You should note that, if you invest in BHG, your capital will be at risk and you may therefore lose some or all of any amount that you choose to invest. This material is not intended to constitute, and should not be construed as, investment advice. Potential investors in BHG should seek their own independent financial advice. BHAM neither provides investment advice to, nor receives and transmits orders from, investors in BHG nor does it carry on any other activities with or for such investors that constitute "MiFID or equivalent third country business" for the purposes of the FSA Rules.

PAST PERFORMANCE IS NOT A RELIABLE INDICATOR OF FUTURE RESULTS


BH Global Limited 

Manager:

Brevan Howard Offshore
Management Limited

Administrator:

Northern Trust

Listing:

London Stock Exchange

Nasdaq Dubai (USD Class)

Bermuda Stock Exchange

Total Assets:

$1,011mm as at 
30 October 2009

Overview:

BHG is a closed-ended investment company, registered and incorporated in Guernsey on 25 February 2008 (Registration Number: 48555).

BHG invests all of its assets (net of short-term working capital) in the ordinary shares of Brevan Howard Global Opportunities Master Fund Limited ("BHGO"). 

BHGO invests all of its assets, net of cash retained for short-term working capital and efficient portfolio management, in investment funds of which one or more of the Brevan Howard group of affiliated entities is the manager or investment manager (the "Underlying Funds").

BHG was admitted to the Official List of the UK Listing Authority and to trading on the Main Market of the London Stock Exchange on 29 May 2008. 

 

Summary information

BH Global Limited NAVs per share (as at 30 October 2009)

Shares Class

NAV*(USD mm)

NAV* per Share

USD Shares

320

$11.59

EUR Shares

125

€11.64

GBP Shares

565

1171p


BH Global Limited NAV per Share* % Monthly Change

USD

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

YTD

2008

 

 

 

 

 

1.161

0.10

0.05 

-3.90 

1.13 

2.75 

0.38 

1.55

2009

3.35

1.86

1.16

1.06

2.79

-0.21

1.07

0.27

1.49

0.54



14.14


EUR

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

YTD

2008

 

 

 

 

 

1.281

0.25

0.29 

-4.36 

1.15 

3.03 

0.44 

1.93

2009

3.57

1.94

1.13

1.05

2.54

-0.21

1.11

0.27

1.50

0.50



14.18


GBP

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

YTD

2008

 

 

 

 

 

1.401

0.33

0.40 

-4.19 

1.25 

3.29 

0.41 

2.76

2009

3.52

1.94

1.03

0.68

2.85

-0.28

1.05

0.31

1.51

0.58



13.92


1 Performance is calculated from a base NAV per Share of 10 in each currency. The opening NAV in May 2008 was 9.9 (after deduction of the IPO costs borne by BHG).

* NAV performance is provided for information purposes only. Shares in the Fund do not necessarily trade at a price equal to the prevailing NAV per Share.  

Source: Underlying NAV data for the funds in which BHGO invests in is provided by their Administrator, International Fund Services (Ireland) Limited. BHG NAV and NAV per Share data is provided by the BHG's Administrator, Northern Trust International Fund Administration Services (Guernsey) Limited. BHG NAV per Share % Monthly Change calculations made by BHAM. 

BHG NAV data is unaudited and net of all investment management fees and all other fees and expenses payable by BHG. PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS.

Manager Update

Brevan Howard Offshore Management Limited (the "Manager") is manager of all

the Brevan Howard branded funds, including BHG, and has responsibility for allocating capital to the Underlying Funds. The Manager has provided the following update:

New Allocation to Brevan Howard Credit Catalysts Master Fund Limited ("BHCC")

As announced to the market earlier in the month, following extensive due diligence, the Investment Committee of the Manager (the "IC") determined during October to make a small allocation to the BHCC on 1 November 2009. Accordingly, BHGO invested approximately USD23.2mm (or currency-equivalent for non-USD classes) in the USD, GBP and EUR share classes of BHCC. Further details of the impact of this allocation on BHGO's total allocation profile will be contained in the November Shareholder Report.

The investment objective of BHCC is to generate high absolute returns by trading and investing in financial assets in the corporate credit, mortgage-backed securities and asset-backed securities markets. BHCC's investment strategy primarily focuses on trading opportunities with relatively near-term pay-offs and, in particular, on opportunities within corporate and asset-backed securities for which there are near-term catalysts for price improvement, rather than just employing a "buy and hold cheap assets" investment approach.   BHCC is managed by a highly-experienced team of 20 investment professionals led by David Warren, a 22-year veteran in the mortgage and corporate credit markets. Prior to the inception of BHCC, Mr. Warren and BHCC's senior portfolio managers successfully traded a sizeable allocation of capital for BHMF.  


The IC believes that this allocation will provide further diversification to BHGO's portfolio and additional exposure to a trading strategy with potential to contribute to BHG's long term capital appreciation. 


Status of Brevan Howard Emerging Market Strategies Master Fund Limited ("BHEMS")

The Board of Directors of Brevan Howard Emerging Market Strategies Fund Limited and the Board of Directors of the General Partner of Brevan Howard Emerging Market Strategies Fund LP (together, the "Boards") have decided to close their funds to general subscriptions after the 1st November subscription date. BHEMS has grown to its current size of approximately $2.5bn (as at 1st November 2009) due to continued strong performance and capital inflows throughout the year. The Boards and the Manager are comfortable that the investment manager can continue to meet BHEMS's investment objectives but believe that it is prudent to control the growth of the fund at the present time.   

Class closure votes and amendments to discount management arrangements

As previously announced, on 15 October 2009 BHG held an Extraordinary General Meeting and meetings of each of its share classes to propose class closure resolutions in accordance with BHG's articles of association and to also propose amendments to BHG's discount management arrangements.

The class closure resolutions failed but the resolutions to amend BHG's discount management arrangements were duly passed so that discount management period now runs on a calendar year basis, commencing 1 January 2010. Further class closure votes will be triggered in respect of a Share class if in any calendar year the average closing market price on the London Stock Exchange of that Share class is in excess of a 10% discount to average NAV per share of that Share class over the 12 month end NAV calculation dates in that calendar year.

Update from Brevan Howard Asset Management LLP ("BHAM")

BHAM, an investment manager of the Underlying Funds, has informed the Manager that following his return from sabbatical last year, Jean-Philippe Blochet has decided to cease to be an active member of BHAM. Jean-Philippe has made a valuable contribution to the success of Brevan Howard and BHAM wishes him well in his future endeavours.

Monthly Performance Commentaries
for Underlying Funds


Investment 

Estimated MTD performance 
(as at 30 October 2009)

Brevan Howard Master Fund Limited Class Y (USD)*

1.00%

Brevan Howard Asia Master Fund Limited Class X (USD)*

-0.07%

Brevan Howard Equity Strategies Fund Limited Class A (USD)*

2.58%

Brevan Howard Emerging Markets Strategies Master Fund Limited Class X (USD)*

0.48%

Brevan Howard Strategic Opportunities Feeder Fund Limited Class A (USD)*

-0.69 %


* The USD currency class of each Underlying Fund is used as a proxy for the performance of each of the Underlying Funds; BHGO also invests in the EUR and GBP of the Underlying Funds.

Source: MTD performance data is provided by the Administrator, International Fund Services (Ireland) Limited ("IFS"). MTD performance data is net of all investment management fees and all other fees and expenses payable.  PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS.

Brevan Howard Master Fund Limited ("BHMF")

The NAV per share of BHMF USD Class Y Shares gained 1.00% in October. BHMF generated positive P/L across a range of strategies during the month, including fixed income directional, volatility and relative value trades. BHMF also made gains in FX, credit and, to a lesser extent, equities. Small losses were incurred in fixed income curve trades and commodities.

Brevan Howard Asia Master Fund Limited ("BHAMF")

The NAV per share of BHAMF USD Class X Shares fell by 0.07% in October. BHAMF made money in the first half of the month due to a weaker USD versus Asian currencies in the FX markets but then gave back these gains in the second half of the month as the USD strengthened.

Brevan Howard Equity Strategies Fund Limited ("BHES")

The NAV per share of BHES USD Class A Shares gained 2.58% in October. Most of the positive P/L for the month was made in financials, energy and industrials. Small losses were incurred in cyclicals and technology.

Brevan Howard Emerging Markets Strategies Master Fund Limited 

The NAV per Share of BHEMS Class X Shares gained 0.48% in October. BHEMS's equity relative value positions were the fund's best performing exposure in October. Credit also contributed positively to performance for the month. The convexity overlay and the FX trades detracted from performance for the month.

Brevan Howard Strategic Opportunities Feeder Fund Limited ("BHSOFF")

The NAV per share of BHSOFF Class A USD Shares fell by 0.69% in October. Brevan Howard Strategic Opportunities Fund Limited suffered some losses in fixed income relative value trades and FX. These were partially offset by gains in fixed income volatility and curve trades.


Allocations and Commentary

Allocations of BHGO by fund estimated as at 30 October 2009 (allocations of BHGO are subject to change):

Investment 

Allocation (% NAV)

Brevan Howard Master Fund Limited 

38.3

Brevan Howard Asia Master Fund Limited 

18.4

Brevan Howard Equity Strategies Fund Limited 

6.7

Brevan Howard Emerging Markets Strategies Master Fund Limited 

20.6

Brevan Howard Strategic Opportunities Feeder Fund Limited 

8.6

Cash/Other

7.4


Source: BHAM


Exposures by strategy estimated as at 30 October 2009 (% of total VaR; excludes cash exposure) - allocations of BHGO are subject to change:

Strategy

% of total VaR, excluding cash exposure*

Fixed Income 

32

Vega 

16

Equity 

32

Credit 

7

FX 

9

Commodities

3


Source: BHAM; figures rounded to the nearest whole number


In October, the IC re-invested a significant proportion of the cash cushion accumulated in BHGO for discount management purposes in certain of the Underlying Funds. 

The IC increased BHGO's exposure to BHMF to balance further the exposure to the range of asset classes provided by the Underlying Funds. 

BHGO exposure to the other Underlying Funds remained fairly constant during October.

In the case of BHES, the appointment of Fabrizio Gallo (see the September 2009 Shareholder Report) as head of equities at BHAM and strategy manager for BHES, has led to several changes to the management of this fund. Specifically, BHES has begun to increase its geographical diversification and focus on higher capitalisation stocks. Further, a more systematic use of derivatives has been introduced to attempt to improve the risk/reward characteristics around investment decisions as well as provide better protection to the overall portfolio. The IC views these as positive changes. As such, the IC believes that an increased allocation is possible going forward. 



This information is provided by RNS
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