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BH MACRO LIMITED
MONTHLY SHAREHOLDER REPORT:
OCTOBER 2016
YOUR ATTENTION IS DRAWN TO THE DISCLAIMER AT THE END OF THIS
DOCUMENT |
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BH Macro Limited |
Overview |
Manager:
Brevan Howard Capital Management LP (“BHCM”)
Administrator:
Northern Trust International Fund Administration Services
(Guernsey) Limited (“Northern Trust”)
Corporate Broker:
J.P. Morgan Cazenove
Listings:
London Stock Exchange (Premium Listing)
NASDAQ Dubai - USD Class (Secondary listing)
Bermuda Stock Exchange (Secondary listing) |
BH Macro Limited (“BHM”) is a closed-ended investment
company, registered and incorporated in Guernsey on 17 January 2007
(Registration Number: 46235).
BHM invests all of its assets (net of short-term working capital)
in the ordinary shares of Brevan Howard Master Fund Limited (the
“Fund”).
BHM was admitted to the Official List of the UK Listing Authority
and to trading on the Main Market of the London Stock Exchange on
14 March 2007. |
Total
Assets: |
$824 mm¹ |
|
1. As at 31 October 2016. Source: BHM's administrator,
Northern Trust. |
Summary
Information |
BH Macro
Limited NAV per Share (Calculated as at 31 October 2016) |
Share
Class |
NAV
(USD mm) |
NAV
per Share |
USD
Shares |
215.4 |
$20.60 |
EUR
Shares |
43.5 |
€20.75 |
GBP
Shares |
564.5 |
£21.35 |
|
BH Macro
Limited NAV per Share % Monthly Change |
USD |
Jan |
Feb |
Mar |
Apr |
May |
Jun |
Jul |
Aug |
Sep |
Oct |
Nov |
Dec |
YTD |
2007 |
|
|
0.10 |
0.90 |
0.15 |
2.29 |
2.56 |
3.11 |
5.92 |
0.03 |
2.96 |
0.75 |
20.27 |
2008 |
9.89 |
6.70 |
-2.79 |
-2.48 |
0.77 |
2.75 |
1.13 |
0.75 |
-3.13 |
2.76 |
3.75 |
-0.68 |
20.32 |
2009 |
5.06 |
2.78 |
1.17 |
0.13 |
3.14 |
-0.86 |
1.36 |
0.71 |
1.55 |
1.07 |
0.37 |
0.37 |
18.04 |
2010 |
-0.27 |
-1.50 |
0.04 |
1.45 |
0.32 |
1.38 |
-2.01 |
1.21 |
1.50 |
-0.33 |
-0.33 |
-0.49 |
0.91 |
2011 |
0.65 |
0.53 |
0.75 |
0.49 |
0.55 |
-0.58 |
2.19 |
6.18 |
0.40 |
-0.76 |
1.68 |
-0.47 |
12.04 |
2012 |
0.90 |
0.25 |
-0.40 |
-0.43 |
-1.77 |
-2.23 |
2.36 |
1.02 |
1.99 |
-0.36 |
0.92 |
1.66 |
3.86 |
2013 |
1.01 |
2.32 |
0.34 |
3.45 |
-0.10 |
-3.05 |
-0.83 |
-1.55 |
0.03 |
-0.55 |
1.35 |
0.40 |
2.70 |
2014 |
-1.36 |
-1.10 |
-0.40 |
-0.81 |
-0.08 |
-0.06 |
0.85 |
0.01 |
3.96 |
-1.73 |
1.00 |
-0.05 |
0.11 |
2015 |
3.14 |
-0.60 |
0.36 |
-1.28 |
0.93 |
-1.01 |
0.32 |
-0.78 |
-0.64 |
-0.59 |
2.36 |
-3.48 |
-1.42 |
2016 |
0.71 |
0.73 |
-1.77 |
-0.82 |
-0.28 |
3.61 |
-0.99 |
-0.17 |
-0.37 |
0.77 |
|
|
1.34 |
|
EUR |
Jan |
Feb |
Mar |
Apr |
May |
Jun |
Jul |
Aug |
Sep |
Oct |
Nov |
Dec |
YTD |
2007 |
|
|
0.05 |
0.70 |
0.02 |
2.26 |
2.43 |
3.07 |
5.65 |
-0.08 |
2.85 |
0.69 |
18.95 |
2008 |
9.92 |
6.68 |
-2.62 |
-2.34 |
0.86 |
2.84 |
1.28 |
0.98 |
-3.30 |
2.79 |
3.91 |
-0.45 |
21.65 |
2009 |
5.38 |
2.67 |
1.32 |
0.14 |
3.12 |
-0.82 |
1.33 |
0.71 |
1.48 |
1.05 |
0.35 |
0.40 |
18.36 |
2010 |
-0.30 |
-1.52 |
0.03 |
1.48 |
0.37 |
1.39 |
-1.93 |
1.25 |
1.38 |
-0.35 |
-0.34 |
-0.46 |
0.93 |
2011 |
0.71 |
0.57 |
0.78 |
0.52 |
0.65 |
-0.49 |
2.31 |
6.29 |
0.42 |
-0.69 |
1.80 |
-0.54 |
12.84 |
2012 |
0.91 |
0.25 |
-0.39 |
-0.46 |
-1.89 |
-2.20 |
2.40 |
0.97 |
1.94 |
-0.38 |
0.90 |
1.63 |
3.63 |
2013 |
0.97 |
2.38 |
0.31 |
3.34 |
-0.10 |
-2.98 |
-0.82 |
-1.55 |
0.01 |
-0.53 |
1.34 |
0.37 |
2.62 |
2014 |
-1.40 |
-1.06 |
-0.44 |
-0.75 |
-0.16 |
-0.09 |
0.74 |
0.18 |
3.88 |
-1.80 |
0.94 |
-0.04 |
-0.11 |
2015 |
3.34 |
-0.61 |
0.40 |
-1.25 |
0.94 |
-0.94 |
0.28 |
-0.84 |
-0.67 |
-0.60 |
2.56 |
-3.22 |
-0.77 |
2016 |
0.38 |
0.78 |
-1.56 |
-0.88 |
-0.38 |
3.25 |
-0.77 |
0.16 |
-0.56 |
0.59 |
|
|
0.92 |
|
GBP |
Jan |
Feb |
Mar |
Apr |
May |
Jun |
Jul |
Aug |
Sep |
Oct |
Nov |
Dec |
YTD |
2007 |
|
|
0.11 |
0.83 |
0.17 |
2.28 |
2.55 |
3.26 |
5.92 |
0.04 |
3.08 |
0.89 |
20.67 |
2008 |
10.18 |
6.86 |
-2.61 |
-2.33 |
0.95 |
2.91 |
1.33 |
1.21 |
-2.99 |
2.84 |
4.23 |
-0.67 |
23.25 |
2009 |
5.19 |
2.86 |
1.18 |
0.05 |
3.03 |
-0.90 |
1.36 |
0.66 |
1.55 |
1.02 |
0.40 |
0.40 |
18.00 |
2010 |
-0.23 |
-1.54 |
0.06 |
1.45 |
0.36 |
1.39 |
-1.96 |
1.23 |
1.42 |
-0.35 |
-0.30 |
-0.45 |
1.03 |
2011 |
0.66 |
0.52 |
0.78 |
0.51 |
0.59 |
-0.56 |
2.22 |
6.24 |
0.39 |
-0.73 |
1.71 |
-0.46 |
12.34 |
2012 |
0.90 |
0.27 |
-0.37 |
-0.41 |
-1.80 |
-2.19 |
2.38 |
1.01 |
1.95 |
-0.35 |
0.94 |
1.66 |
3.94 |
2013 |
1.03 |
2.43 |
0.40 |
3.42 |
-0.08 |
-2.95 |
-0.80 |
-1.51 |
0.06 |
-0.55 |
1.36 |
0.41 |
3.09 |
2014 |
-1.35 |
-1.10 |
-0.34 |
-0.91 |
-0.18 |
-0.09 |
0.82 |
0.04 |
4.29 |
-1.70 |
0.96 |
-0.04 |
0.26 |
2015 |
3.26 |
-0.58 |
0.38 |
-1.20 |
0.97 |
-0.93 |
0.37 |
-0.74 |
-0.63 |
-0.49 |
2.27 |
-3.39 |
-0.86 |
2016 |
0.60 |
0.70 |
-1.78 |
-0.82 |
-0.30 |
3.31 |
-0.99 |
-0.10 |
-0.68 |
0.80 |
|
|
0.65 |
|
Source: Fund NAV data is provided by the administrator of
the Fund, International Fund Services (Ireland) Limited (“IFS”).
BHM NAV and NAV per Share data is provided by BHM’s administrator,
Northern Trust. BHM NAV per Share % Monthly Change is calculated by
BHCM. BHM NAV data is unaudited and net of all investment
management fees (2% annual management fee and 20% performance fee)
and all other fees and expenses payable by BHM. In addition, the
Fund is subject to an operational services fee of 50bps per
annum.
NAV performance is provided for information purposes only. Shares
in BHM do not necessarily trade at a price equal to the prevailing
NAV per Share.
Data as at 31 October 2016
PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. |
ASC 820 Asset Valuation Categorisation*
Performance Review
|
Brevan Howard
Master Fund Limited |
Unaudited as at 31
October 2016 |
|
% of
Gross Market Value* |
Level
1 |
77.6 |
Level
2 |
21.9 |
Level
3 |
0.2 |
At
NAV |
0.3 |
Source: BHCM
* This data is unaudited and has been calculated by BHCM using
the same methodology as that used in the most recent audited
financial statements of the Fund.
Level 1: This represents the level of assets in the portfolio
which are priced using unadjusted quoted prices in active markets
that are accessible at the measurement date for identical,
unrestricted assets or liabilities.
Level 2: This represents the level of assets in the portfolio
which are priced using either (i) quoted prices that are identical
or similar in markets that are not active or (ii) model-derived
valuations for which all significant inputs are observable, either
directly or indirectly in active markets.
Level 3: This represents the level of assets in the portfolio
which are priced or valued using inputs that are both significant
to the fair value measurement and are not observable directly or
indirectly in an active market.
At NAV: This represents the level of assets in the portfolio
that are invested in other Brevan Howard funds and priced or valued
at NAV as calculated by IFS.
The information in this section has been provided to BHM by
BHCM.
FX gains during the first half of the month came predominately
from short positioning in GBP and to a lesser extent JPY versus the
US dollar. Further gains, later in the month, came from long
positioning in MXN although this was partly offset by small losses
in Scandinavian currency trading. Interest rate gains came
primarily from directional positioning in sterling rates with
further small gains from Canadian, USD and emerging market rates
trading together with European swap spread and basis trading. These
gains were partially offset by losses in interest rate volatility
trading.
The performance review and attributions are derived from data
calculated by BHCM, based on total performance data for each period
provided by the Fund’s administrator (IFS) and risk data provided
by BHCM, as at 31 October 2016.
|
|
Performance by Asset Class
Monthly, quarterly and annual
contribution (%) to the performance of BHM USD Shares (net of fees
and expenses) by asset class as at 31 October 2016
2016 |
Rates |
FX |
Commodity |
Credit |
Equity |
Discount Management & Tender Offer |
Total |
Oct
2016 |
0.20 |
0.46 |
-0.02 |
0.04 |
-0.02 |
0.11 |
0.77 |
Q1
2016 |
1.17 |
-0.82 |
-0.14 |
0.02 |
-1.14 |
0.57 |
-0.35 |
Q2
2016 |
0.01 |
-0.09 |
0.03 |
0.05 |
-0.39 |
2.90 |
2.47 |
Q3
2016 |
-0.52 |
-1.55 |
0.01 |
0.20 |
-0.34 |
0.68 |
-1.52 |
QTD
2016 |
0.20 |
0.46 |
-0.02 |
0.04 |
-0.02 |
0.11 |
0.77 |
YTD
2016 |
0.85 |
-2.00 |
-0.12 |
0.31 |
-1.87 |
4.31 |
1.34 |
PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS.
Methodology and Definition of
Contribution to Performance:
Attribution by asset class is produced at the instrument level,
with adjustments made based on risk estimates.
The above asset classes are categorised as follows:
“Rates”: interest rates markets
“FX”: FX forwards and options
“Commodity”: commodity futures and options
“Credit”: corporate and asset-backed indices, bonds and
CDS
“Equity”: equity markets including indices and other
derivatives
“Discount Management & Tender Offer”: buyback
activity for discount management purposes and repurchases under the
tender offer launched on 27 April
2016.
Performance by Strategy Group
Monthly, quarterly and annual
contribution (%) to the performance of BHM USD Shares (net of fees
and expenses) by strategy group as at 31
October 2016
2016 |
Macro |
Systematic |
Rates |
FX |
Equity |
Credit |
EMG |
Commodity |
Discount Management & Tender Offer |
Total |
Oct
2016 |
0.60 |
-0.02 |
-0.04 |
0.06 |
-0.00 |
0.12 |
-0.05 |
-0.00 |
0.11 |
0.77 |
Q1
2016 |
-1.10 |
0.01 |
0.56 |
-0.02 |
-0.01 |
-0.34 |
-0.02 |
-0.00 |
0.57 |
-0.35 |
Q2
2016 |
-0.44 |
-0.01 |
-0.24 |
0.01 |
-0.01 |
0.08 |
0.21 |
-0.00 |
2.90 |
2.47 |
Q3
2016 |
-2.14 |
-0.01 |
0.13 |
-0.28 |
-0.00 |
0.17 |
-0.06 |
-0.00 |
0.68 |
-1.52 |
QTD
2016 |
0.60 |
-0.02 |
-0.04 |
0.06 |
-0.00 |
0.12 |
-0.05 |
-0.00 |
0.11 |
0.77 |
YTD
2016 |
-3.06 |
-0.03 |
0.39 |
-0.22 |
-0.01 |
0.03 |
0.08 |
-0.00 |
4.31 |
1.34 |
PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS.
Methodology and Definition of
Contribution to Performance:
Strategy Group attribution is approximate and has been derived
by allocating each trader book in the Fund to a single category. In
cases where a trader book has activity in more than one category,
the most relevant category has been selected.
The above strategies are categorised as follows:
“Macro”: multi-asset global markets, mainly directional
(for the Fund, the majority of risk in this category is in
rates)
“Systematic”: rules-based futures trading
“Rates”: developed interest rates markets
“FX”: global FX forwards and options
“Equity”: global equity markets including indices and
other derivatives
“Credit”: corporate and asset-backed indices, bonds and
CDS
“EMG”: global emerging markets
“Commodity”: liquid commodity futures and options
“Discount Management & Tender Offer”: buyback
activity for discount management purposes and repurchases under the
tender offer launched on 27 April
2016.
|
Manager's Market Review and Outlook |
The information in
this section has been provided to BHM by BHCM |
Market
Commentary
US
Going into the US Presidential election the economy appeared to be
on firmer footing. Real GDP growth in the third quarter is
estimated to have risen at an annual rate of 2.9%, paced by
inventory restocking and net trade. Most of the increase in exports
owed to a huge jump in agricultural shipments that is
unsustainable. Meanwhile, consumption outlays slowed and business
fixed investment was mixed. Residential investment continues to
languish despite favourable fundamentals. Looking forward, retail
sales have resumed advancing at a solid rate and forward-looking
indicators may point to a flattening out in what has been a
year-long decline in business equipment spending.
Price inflation has been unexciting. The year-over-year change in
core personal consumption expenditures inflation was 1.7% in the
third quarter, little different from the 1.6% increase seen in the
prior two quarters. However, wages are showing some signs of life.
Average hourly earnings rose 2.8% in the year ended in October, the
fastest clip seen during the expansion. As the labour market
gradually tightens further, steady upward pressure on wages and to
a lesser extent, prices, is expected.
Overall the labour market is solid. The unemployment rate ticked
down to 4.9% in October and job gains averaged 175,000 over the
last three months. However, the work week is still in the lower end
of the range seen over the past three years.
The Presidential election of Donald Trump and Republican sweep of
Congress will usher in a number of important policy changes that
will reshape the economic outlook. At the top of the agenda are tax
reform, fiscal spending on defence and infrastructure, and trade
renegotiation. These policy initiatives have the potential to add
to growth and inflation in the coming years. But, it’s still early
days and precise estimates of the economic impact of a Trump
Presidency are necessarily speculative.
UK
Since the EU referendum in June, the UK economy has proved more
resilient than initially expected by many forecasters, including
the Bank of England (“BoE”). Q3 GDP came in at 0.5% q/q, compared
to the BoE’s forecast in the August Inflation Report of 0.1% q/q,
while the Q2 print was revised up to 0.7% q/q from an already
strong reading of 0.6% q/q. The Q3 outcome reflected continued
robust consumption growth, with services output increasing by 0.8%
q/q. Anecdotal evidence suggests that the cheaper currency
has attracted more tourists to the UK and encouraged them to spend.
Consumption spending has also been underpinned by the resilience of
the housing market. While most indicators pointed to a cooling
housing market between May and August, the latest data show signs
of re-acceleration. As housing accounts for a significant part of
consumers’ aggregate wealth, the resilience of the housing market
is likely to continue to support private consumption going forward.
Consistent with this outlook, retail sales have so far remained
largely unaffected by the referendum, fluctuating around an annual
growth rate of 5%, but some slowdown is expected once the weaker
exchange rate has fully fed through to consumer prices, thereby
weighing on consumers’ real purchasing power. The labour market has
largely moved sideways in recent months.
The survey data point to a continued expansion, if not a slight
acceleration of GDP in Q4. Indeed, the UK Composite Purchasing
Managers’ Index (“PMI”) rose to 54.8 in October from 53.9 in
September, reaching its highest level since January. Meanwhile, the
recovery in global commodity prices along with the depreciation in
Sterling has lifted inflation to 1.0% y/y in the latest release,
with more pass-through still to come from the weaker currency. The
higher than expected outcome of growth in Q3 and the depreciation
in Sterling between August and November was also reflected in the
forecast revisions in the BoE’s November Inflation Report and a
decision by the Monetary Policy Committee (“MPC”) not to deliver on
its envisaged interest rate cut. The inflation forecast was revised
up to 2.7% from 2.0% y/y in 2017 and to 2.7% y/y from 2.4% y/y in
2018. Inflation was seen at 2.5% y/y in 2019 – one of the largest
overshoots in the inflation projection by the end of the forecast
horizon since the BoE’s independence in 1997. Those revisions
predominantly reflected the weaker currency, adversely affecting
the BoE’s trade-off between stabilising output and keeping
inflation close to target. While the Bank stressed that “the MPC
judges it appropriate to accommodate a period of above-target
inflation”, it dropped its easing bias, moving to a more neutral
policy stance: “Monetary policy can respond, in either direction,
to changes to the economic outlook as they unfold to ensure a
sustainable return of inflation to the 2% target.” Meanwhile, the
Brexit process has been complicated by a ruling of the High Court,
requiring an Act of Parliament before the Government can trigger
the exit process, as set out in Article 50 TEU. The Government has
announced that it would appeal the decision before the Supreme
Court and that it would stick to the existing timetable that
foresees Article 50 being triggered by the end of March 2017. The hearing before the Supreme Court
will take place in early December.
EMU
Euro area Q3 GDP grew by 0.3% q/q, in line with expectations,
maintaining the same pace of expansion as in Q2. The first surveys
for Q4 have been stronger than expected: the German IFO increased
again (to its highest level since April
2014), largely driven by stronger business expectations and
suggests, for now, Brexit concerns have been reduced. The EMU
Composite PMI rebounded to 53.3 (its highest since January), led by
Germany. The survey data suggests a firmer start to Q4, although
some caution is warranted given geopolitical uncertainties and
confirmation of actual monthly economic data is required. With
regards to the latter, both EMU Industrial Production (“IP”) and
retail sales remained soft at the end of Q3, with national data
pointing to a weak start to Q4 for EMU car sales. The overall
picture remains one of slow progress towards closing the output
gap. The EMU unemployment rate was unchanged at 10% in September
for a third month and the pace of the trend decline in the number
of unemployed has slowed this year. Wage growth has also yet to
pick up despite the improvement in the labour market in recent
years. While headline inflation has started to move higher (0.5%
y/y in October) and will likely move above 1% early next year on
current projections, this is being driven by energy price base
effects. Furthermore, headline inflation after Q1 2017 will begin
to decline and converge down towards a too-low rate of core
inflation – currently just 0.8% y/y in October. Core inflation is
expected to remain subdued and this inertia will keep pressure on
the ECB to announce in December stimulus beyond March 2017.
China
Activity data in China for October showed mixed signs of
stabilisation. On the one hand, the official PMI and Caixin PMI
came out at 51.2, much stronger than expectations and the highest
level since the third quarter of 2014, while Fixed Asset Investment
growth also rose further to 8.3% y/y YTD, mostly due to some
bottoming out of private investment and continued decent growth of
infrastructure investment. On the other hand, IP growth stayed flat
at 6.1% y/y, while retail sales growth slowed. Consumer Price Index
(“CPI”) inflation, after rising to 1.9% in September, accelerated
to 2.1% in October mainly due to a low base effect. On the external
side, trade data have continued to bottom out on sequential
basis.
The People’s Bank of China is faced with an increased challenge to
its monetary policy due to the rising concern about the level of
asset prices. Total Social Financing’s flows fell in October,
although mostly due to seasonality: YTD growth continued to rise,
to 14.2% y/y. The 7-day repo rate has been volatile for the past
month, ranging from 2.3% to 3%, which is the highest level since
early 2015. Investments in infrastructure, a gauge of policy-driven
growth, had sustained decent growth in October, but investment by
State Owned Enterprises slowed somewhat. FX reserves in October
declined slightly to US$3.12
trillion.
Japan
Real GDP rose 2.2% (annualised rate) in the third quarter, although
much of the growth came from a bounce back in exports after a dip
in the previous quarter. Private domestic demand, especially
household consumption, was modest. The most positive news
came from the Economy Watchers Survey, which rebounded in
October. It remains below the 50-par line, but its level is
much closer to what was seen last year, rather than the weak levels
in the spring. The Shoko-Chukin index of small and
medium-sized enterprises was little changed in November at a level
slightly above its two-year average.
Inflation remains weak. The GDP deflator fell 1.3%, after
slipping 0.1% in the second quarter, the first declines seen since
2013. Deflators other than for Government consumption were
generally down in the quarter. Meanwhile, consumer prices as
measured by the CPI appear to be trending roughly sideways.
The combination of a flat seasonally adjusted figure for
western-core Tokyo prices and a 0.1% increase in the core rate
indicates only a fraction of an increase in the month.
The Bank of Japan (“BoJ”) announced no changes to monetary policy
as it digests the implications of its new policy of managing
long-term rates. It also marked down its inflation
expectations over the next two years, now predicting inflation
falls a little short of its two-percent goal over the next two
years. Even so, its forecast of a 1.5 percentage point
acceleration in prices in the 2017 fiscal year is unreasonably
optimistic. That’s true even after allowing for some
depreciation pressures in the yen as markets reprice expected
interest rate differentials in the wake of the US presidential
election. More generally, monetary policy in Japan is in for
some interesting times. On the one hand, if markets put only
modest pressure on Government securities prices, Japan may benefit
from more monetary policy stimulus under its yield-curve management
policy than otherwise expected and hence a relatively somewhat
weaker yen. On the other hand, if a general bond-market
revolt reaches Japan, then the BoJ’s tolerance for JGB purchases to
keep a lid on longer-term yields will be severely tested. At
the very least investors will ask questions.
Even without a bond-market revolt, the US elections are a two-edged
sword for Japan. Even before November it was thought that the
Trans-Pacific Partnership was dead in the water; the elections
scuttled it. That strips the Abe administration of even a
pretence of a vehicle for broader structural reforms. At the
same time, more attention and energy will have to be devoted to
maintaining previous gains to free trade, as well as a general
reconsideration of the nation’s geo-political framework. In
that environment it’s natural to think that structural reform plans
may be scaled back or delayed. |
Enquiries |
Northern Trust
International Fund Administration Services (Guernsey)
Limited
Harry Rouillard +44 (0) 1481 74 5315 |
Important Legal Information and
Disclaimer
BH Macro Limited (“BHM") is a feeder fund investing in Brevan
Howard Master Fund Limited (the "Fund"). Brevan Howard
Capital Management LP (“BHCM”) has supplied certain information
herein regarding BHM’s and the Fund’s performance and outlook.
The material relating to BHM and the Fund included in this
report is provided for information purposes only, does not
constitute an invitation or offer to subscribe for or purchase
shares in BHM or the Fund and is not intended to constitute
“marketing” of either BHM or the Fund as such term is understood
for the purposes of the Alternative Investment Fund Managers
Directive as it has been implemented in states of the European
Economic Area. 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 BHM
and the Fund have been obtained or derived from sources believed to
be reliable, but none of BHM, the Fund or BHCM make any
representation as to their accuracy or completeness. Any estimates
may be subject to error and significant fluctuation, especially
during periods of high market volatility or disruption. Any
estimates should be taken as indicative values only and no reliance
should be placed on them. Estimated results, performance or
achievements may materially differ from any actual results,
performance or achievements. Except as required by applicable law,
BHM, the Fund and BHCM expressly disclaim any obligations to update
or revise such estimates to reflect any change in expectations, new
information, subsequent events or otherwise.
Tax treatment depends on the individual circumstances of each
investor in BHM and may be subject to change in the future. Returns
may increase or decrease as a result of currency fluctuations.
You should note that, if you invest in BHM, 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. All
investments are subject to risk. You are advised to seek expert
legal, financial, tax and other professional advice before making
any investment decisions.
THE VALUE OF INVESTMENTS CAN GO DOWN
AS WELL AS UP. YOU MAY NOT GET BACK THE AMOUNT ORIGINALLY
INVESTED AND YOU MAY LOSE ALL OF YOUR INVESTMENT. PAST
PERFORMANCE IS NOT A RELIABLE INDICATOR OF FUTURE RESULTS.
Risk Factors
Acquiring shares in BHM may expose an investor to a significant
risk of losing all of the amount invested. Any person who is in any
doubt about investing in BHM (and therefore gaining exposure to the
Fund) should consult an authorised person specialising in advising
on such investments. Any person acquiring shares in BHM must be
able to bear the risks involved. These include the following:
• The Fund is speculative and involves substantial risk.
• The Fund will be leveraged and will engage in speculative
investment practices that may increase the risk of investment loss.
The Fund may invest in illiquid securities.
• Past results of the Fund’s investment managers are not
necessarily indicative of future performance of the Fund, and the
Fund’s performance may be volatile.
• An investor could lose all or a substantial amount of his or
her investment.
• The Fund’s investment managers have total investment and
trading authority over the Fund, and the Fund is dependent upon the
services of the investment managers.
• Investments in the Fund are subject to restrictions on
withdrawal or redemption and should be considered illiquid. There
is no secondary market for investors’ interests in the Fund and
none is expected to develop.
• The investment managers’ incentive compensation, fees and
expenses may offset the Fund’s trading and investment profits.
• The Fund is not required to provide periodic pricing or
valuation information to investors with respect to individual
investments.
• The Fund is not subject to the same regulatory requirements as
mutual funds.
• A portion of the trades executed for the Fund may take place
on foreign markets.
• The Fund and its investment managers are subject to conflicts
of interest.
• The Fund is dependent on the services of certain key
personnel, and, were certain or all of them to become unavailable,
the Fund may prematurely terminate.
• The Fund’s managers will receive performance-based
compensation. Such compensation may give such managers an incentive
to make riskier investments than they otherwise would.
• The Fund may make investments in securities of issuers in
emerging markets. Investment in emerging markets involve particular
risks, such as less strict market regulation, increased likelihood
of severe inflation, unstable currencies, war, expropriation of
property, limitations on foreign investments, increased market
volatility, less favourable or unstable tax provisions, illiquid
markets and social and political upheaval.
The above summary risk factors do not purport to be a complete
description of the relevant risks of an investment in shares of BHM
or the Fund and therefore reference should be made to publicly
available documents and information.