5.09.2022 Alpine Select Ltd.: Monthly Update August 2022
Alpine Select has published the monthly update August 2022.
Klick here to download the monthly report.
Alpine Select hat den Monatsbericht August 2022 publiziert (nur in Englisch).
Klicken Sie hier um den Bericht einzusehen.
FED Chairman Powell did not tell investors what they wanted to hear in his short Jackson Hole speech at the end of August. During his re-marks on how to restore price stability and reducing inflation, he high-lighted that it will likely require a sustained period of below-trend growth which also will bring some pain to households and businesses. He closed his short remarks by stating that the FED is taking forceful and rapid steps to moderate demand and that the FED will keep at it until the job is done. Therefore, another unusual rate hike of 50-75 basis points at the September meeting is to be expected. Indices went into risk off mode after that and ended the month as follows: S&P -3.9%; NASDAQ: -4.6%; Topix +1.2%; SMI -2.6%.
As the Vifor Pharma M&A Arbitrage deal got paid back in early August we redeployed on three attractive investment opportunities:
- Given the wide credit spreads in investment grade credit we added CHF 5m to the Cheyne Total Return Credit Fund, a long-biased corporate credit strategy with a defined maturity of Dec-2024. The fund manages an Investment Grade Credit risk portfolio. Due to the selloff in bonds the fund currently holds a portfolio with an expected return to maturity of around 40%.
- The migraine compound of Biohaven Pharmaceutical gets acquired by Pfizer. Biohaven common shareholders will receive $148.50 per Biohaven share in cash, plus 0.5 shares of a new publicly traded company that retains Biohaven’s non-migraine pipeline compounds («Newco»). We expect Newco to be worth $5-10 per share. The deal is expected to close in early 2023.
- Idorsia, a high-potential Swiss-based biopharmaceutical company currently has two outstanding convertible bonds, with maturities of 2024 and 2028. We added to both during the month as we believe they are trading at unjustified low levels and represent attractive risk/return profile. Two lead products from Idorsia are already com-mercially available (approved) and are gaining traction. Another in-dication is awaiting approval. The clinical risk involved in compound discovery and successful phase-testing is largely eliminated.
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.