BH Macro Ltd on Thursday reported a large drop in its net asset value during its latest half year and said the climate is likely to remain challenging, but insisted it ‘has not been complacent’ and retains confidence in its strategy.
The Guernsey-based close-ended investment company said its NAV per share was £3.93 at June 30, down from £39.63 at the same time last year for sterling shares. NAV for US dollar shares decreased to $4.08 from $40.76. The majority of BH Macro’s shares are priced in sterling.
BH Macro’s stock was up 1.7% at 363.54 pence in London on Thursday morning.
BH Macro said in late March that the high NAV, which had reached £41.81 and $43.28 per share at December 31, was due to a 2022 net unrealised gain on investments allocated from the master fund of $236.1 million multiplied from $1.7 million the prior year, while net realised gain had more than doubled to $118.7 million from $47.0 million.
BH Macro also said on Thursday that its total assets increased 27% to $2.0 million at June 30 from $1.6 million at the same time one year prior.
‘Whilst it has been a rollercoaster start to the year for BH Macro Ltd, it has also been a period in which the core fundamentals have stood out of how [manager] Brevan Howard Capital Management LP manages the assets of the company and [hedge fund] Brevan Howard Master Fund Ltd and maintains robust risk management systems.,’ commented Chair Richard Horlick.
Horlick added that after a ‘successful start’ to 2023, BH Macro saw ‘an acute reversal of fortunes’ in March as problems in the US banking system caused a sharp reversal in interest rate expectations. He said its portfolio has seen ‘little recovery’ since then.
The company did not declare a dividend for the period, unchanged from last year.
Horlick maintained however that BH Macro ‘has not been complacent’ and retains confidence in its manager and strategy.
Looking ahead, he continued: ‘Conditions, globally, remain uncertain, with significant risks at both the macroeconomic and at the geopolitical level; we anticipate that markets are likely to remain challenging for investors to navigate for the foreseeable future.
‘Your board is very confident in the manager and believes it is very well-placed to profit from these challenges and that the company continues to represent a good diversifier for portfolios.’
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