3.03.2022 Alpine Select Ltd.: Monthly Update February 2022
Alpine Select has published the monthly update February 2022.
Klick here to download the monthly report.
Alpine Select hat den Monatsbericht Februar 2022 publiziert (nur in Englisch).
Klicken Sie hier um den Bericht einzusehen.
Market and portfolio commentary
After months of diplomatic efforts, the before unthinkable has happened with Russia launching a full-scale invasion on the sovereignty of Ukraine. Images of Russian tanks and helicopter squadrons blitzing through Ukraine have shocked the world. As horrific as this war on Eastern Europe soil is, global equity markets appear to have bottomed out; for now. Tightening monetary policy and the ongoing geopolitical tension have already contributed to falling markets since last November. In February, the selected indices performed as follows: S&P 500 -3%, NASDAQ -4.5%, CSI 300 +0.4% and TOPIX JPN +1.3%.
The broader Digital Assets Market was flat over the month, with strong catch-up performances towards the end of February. Prominent assets like Bitcoin, Ethereum, Terra (LUNA) and Solana ended the month in positive territory. We continue to believe in the broader application of blockchain technology and are willing to endure the volatility of digital assets.
Highlighting our current investments in special situations seems appropriate in these uncertain times. We are currently exploiting merger arbitrage opportunities in Vifor Pharma («VIFN») and Arena Pharmaceutical («ARNA»), which make up around 17% of our portfolio. The VIFN deal is expected to close in early Q2 2022. Albeit the arbitrage situation in VIFN shares is managed efficiently by the market participants, the current opportunity still represents a 3% discount. The ARNA deal is expected to close in March 2022. ARNA, a rather overlooked arbitrage situation, is still trading around $95. Pfizer’s all-cash offer is USD 100 per share, representing a current 4. 9% discount.
Our special situation discounted asset, IP Group, had a difficult start to 2022. The discount to NAV widened to 40%, although news flow from the portfolio remains robust and encouraging. For example, financing rounds by IP Group’s portfolio companies continue to be executed at prices at which IP Group posts new unrealized profits. This underscores the resilience of forward-thinking business powered by intellectual property.
As we continue to monitor the impact of this historic geopolitical depression on the economic and financial outcomes, we are also rigorously challenging our overall asset allocation. However, we have not made any changes yet.
We have no exposure to Russian or Ukrainian assets in the portfolio.
About Alpine Select
Alpine Select Ltd is an investment company domiciled in Zug and has been listed on the SIX Swiss Exchange since 1998. The company offers shareholders the key benefit of investing into a global diversified and CHF hedged alternative investment portfolio. The portfolio exposure is actively being risk adjusted to current market sentiment and outlook. The investment style is value oriented and the investments are selected based on the company’s target return of 6-8% p.a. above CHF risk free rate. 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.