08.04.2020 Alpine Select: Annual result 2019, investment activities, corporate actions and outlook
Zug, 8 April 2020
Annual result 2019
Total return to shareholders during the year 2019 was +6.4% (increase of the share price from CHF 13.44 to CHF 14.30). This includes a dividend of CHF 0.30 per share (paid out to shareholders in May 2019) and the issuance of a tradable put option of CHF 0.17 per registered share (in July 2019). The Net Asset Value («NAV») recorded an increase of 9.8% for the same period (from CHF 13.16 to CHF 14.45).
In the financial reporting 2019 in accordance to Swiss GAAP FER, a profit of CHF 14.5 million was disclosed. In the comparative period (financial year 2018) a loss of CHF 17.9 million was reported. The selected investments performed well in 2019 in a general up trending market environment.
Due to the reduced total assets (following the share buyback programs), the members of the Board of Directors of Alpine Select Ltd. («Alpine Select») continue to waive 10% of their compensation, which is granted in addition to their ordinary board of directors’ fee. In addition, no variable remuneration was paid to the management for 2019.
Investment activity 2019
Global equity markets were buoyed as risk assets rallied strongly at the beginning of 2019 to make up for Q4 2018 losses, and again at year-end 2019 as sentiment found support from the US and China agreeing in principle to a Phase 1 of a trade deal. In addition, the US announced they would delay proposed tariffs on auto exports from Europe. There seemed to be a degree of complacency in the market, after an almost 30% rise in the S&P 500 in 2019.
Our listed portfolio contributed a net unrealized gain of CHF 3.6 million. Significant contributions came from Castle Alternative Invest («Castle», CHF 1.8 million) and HBM Healthcare (CHF 0.8 million). The investment in ChemoCentryx, a biopharmaceutical company, contributed CHF 1.7 million realized gains as the stock rallied more than 300% after reporting positive Phase III results on their lead clinical asset. A special situation investment in New Venturetec (Liquidation and subsequent delisting) contributed CHF 1.0 million as we could buy shares on the market at a significant discount to NAV until the last trading day.
Our Japanese managers delivered CHF 3.2 million unrealized gains throughout the year making up in part for their difficult 2018. A highlight with +39% has been the return of Symphony Partners (SFP Value Realization Fund), a Japanese soft activist.
Our Chinese managers contributed solidly with CHF 1.1 million unrealized gains for 2019. As we further strategically seek Chinese exposure, we are optimistic to have selected solid and promising long/short equity managers on the ground.
Corporate Actions – Proposed dividend distribution
The board of directors will propose to the ordinary shareholders’ meeting 2020 to distribute a dividend of CHF 1.00 gross per outstanding share.
Q1 2020 Performance and Outlook
Our cash quota was 13.7% at year-end 2019 to face the in our opinion too complacent markets. Markets turned negative in Q1 2020 and our Net Asset Value («NAV») recorded a decrease of -5.00% (from CHF 14.41 to CHF 13.69) until 2 April 2020. The return to shareholders for the same period has been -9.09% (decrease of the share price from CHF 14.30 to CHF 13.00).
Facing the COVID-19 crisis, it seems too early to look ahead and leave reassuring comments on the economic and international market impact of this crisis. From a humanitarian perspective, this pandemic revealed the international shortcomings in public health and its necessary investments.
The Alpine Select team is attentive and alert to the various developments currently unfolding. Once this crisis normalizes, we are confident to capture opportunities in the best interest of our shareholders. Our cash quota will give us room to maneuver once value of assets will become apparent or attractive discounts will appear.
About Alpine Select
Alpine Select Ltd is an investment company domiciled in Zug and has been listed on the SIX Swiss Exchange since 1998 (since 5 August 2019 in the Swiss Reporting Standard). The company offers its shareholders the key benefit of investing into a diversified alternative investment portfolio. Alpine Select maintains an active and constructive dialogue with management and board of directors of its portfolio companies in the best interest of its shareholders. Alpine Select does not charge any management or performance fees.
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