#LPAIF05/2014
Fixed Income Fund with EM Strategy Establishment in April Investment Strategy Launched April 2017 2017 Professional Investors Only Minority Female Owned Alternative Investment Fund International team and Managed (AIF) with Limited Number of Persons Local Expertise RUSSIA & Licensed by the CySEC CIS, MENA, SSA, LATAM International Team CySEC #LPAIF05/2014
Minority The Fund is part of an investment group that includes ▪ a custody, asset management and intermediation business that is woman owned, set up and managed ; The front desk team has a female to male ratio of ▪ 2:1 ; Meritkapital team comprised of individuals across 10 ▪ nationalities within the EM space that give the fund that extra niche; The investment group was able to grow a unique, ▪ globally benchmarked product offering in a small capital markets industry such as that of Cyprus: The relationships of the group include amongst ▪ the biggest buy side funds in Russia and amongst top 10 globally ranked funds by AUM; Our strong and diverse regional relationships ▪ forms the niche of our business across all business lines; A minority run business that drives achievements of ▪ an innovative nature: Underwrote the first, locally denominated ▪ Kazakh bond that was also settle-able in international exchanges (the issuer was a subsidiary of the sovereign wealth fund of Kazakhstan); During the banking capital controls of Cyprus in ▪ the 2013 local financial crisis, the firm was the first player to bring liquidity back to the market by buying out frozen deposits for an exchange of deposits abroad . CySEC #LPAIF05/2014
Specifics Fund Type: Open-end fund Asset Class: Fixed Income Morningstar Category: Global Emerging Markets, New Issues, Distressed Debt Inception: 01/09/2016 Investment Strategy: 01/04/2017 Fund Base Currency: USD Share Class Currency: USD JP Morgan Emerging Markets Bond Index Benchmark: Monthly Liquidity: Domicile: Cyprus ISIN: CYF000000200 Bloomberg Ticker: MERFXPT CY Settlement platform: CLEARSTREAM CySEC #LPAIF05/2014
Strategy New Issuance Speculation Event Driven Local Expertise Strategy Opportunities Diversification Solid issuers CySEC #LPAIF05/2014
Performance Data as of 31 Jan 2019 Total Fund Assets $37,470,137 Yield Since Inception +0.48% Modified Duration 1.65 years Yield to Worst 4.62% Credit Rating BB Cash 10.56% Repo Instruments 0.19% CySEC #LPAIF05/2014
Performance Since Inception Data as of 31 Jan 2019 2017 o Emerging markets rallied o Hunger for yield o Weakening dollar o Recovering commodity prices Year MFIF Index* 0.29% 2017 2Q 2.21% 2018 2.02% 3Q 2.38% o US Fed quantitative tightening → UST 10 year above 3% 1.45% 4Q 0.54% o EM spreads widening 3.80% o Geo-political tensions: Year (9 month) 5.21% US relations with China, Turkey, -1.40% 2018 1Q -1.78% Russia sanctions o Argentina bailout, elections in Brazil, -3.86% 2Q -3.51% Mexico o Huge Emerging Market ETF outflows 1.41% 3Q 1.87% o Conservative strategy to reduce -0.45% 4Q -1.19% modified duration and exposure to high beta credit -4.29% Year -4.61% 1.14% 2019 2019 1Q (1 month) 4.42% o Fed pausing the interest rate hike o Improvement in geopolitics o Return of Emerging Market *JPMorgan Emerging Market Bond Index (EMBI) ETF inflows o Improved market sentiment post to ugh end to 2018 CySEC #LPAIF05/2014
Performance Since Inception Data as of 31 Jan 2019 *The Fund remained dormant between Sep 2016 and Mar 2017. The Performance is presented from the date the investment strategy was implemented. Fund performance displayed net of fees CySEC #LPAIF05/2014
Country Breakdown Data as of 31 Jan 2019 29,13% 14,61% 10,65% 9,82% 4,94% 4,08% 4,03% 3,96% 2,64% 2,72% 2,67% RU NG TR CY OM BH KE ZA RA AE CySEC #LPAIF05/2014
Asset Allocation History by Region Data as of 31 Jan 2019 Europe Russia/CIS MENA SSA Asia LATAM Other 100.0% 90.0% 80.0% 70.0% 60.0% 50.0% 40.0% 30.0% 20.0% 10.0% 0.0% APR 17 JUN 17 AUG 17 OCT 17 DEC 17 FEB 18 APR 18 JUN 18 AUG 18 OCT 18 DEC 18 Current Region Breakdown 25,5% 8.0% 5.5% 1.5% 32,6% 26,9%
Fund Information Data as of 31 Jan 2019 Sector Breakdown Currency Breakdown CySEC #LPAIF05/2014
Fund Information Data as of 31 Jan 2019 Rating Breakdown Duration Breakdown CySEC #LPAIF05/2014
Top 10 Holdings Data as of 31 Jan 2019 Bloomberg Description % of Total Fund Ticker CySEC #LPAIF05/2014
Fee Structure Performance Fee* 15% per annum Hurdle 3% per annum Management Fee 0.75% per annum Admin Fee US$ 30,000 flat Director Fee US$ 2,500 flat *Performance Fee: On each Valuation Day in a Performance Period, a Performance Fee is accrued for the account of the Manager in an amount equal to 15% of the increase in the Net Asset Value per Share determined as at such Valuation Day (before deduction of any accrued Performance Fees for such period) in excess of an annual Hurdle Rate of 3% compounded annually. The Manager is entitled to an annual payment of Performance Fees, calculated as of the end of Performance period or at other times upon the redemption of Shares or dissolution of the Fund. Performance Fees paid to the Manager are calculated on the basis of unaudited data, are not refundable to the Fund, but may be subject to audit adjustments. CySEC #LPAIF05/2014
Team Members PORTFOLIO MANAGER PERSELLA IOANNIDES has an MBA and an MS in Financial Engineering from Columbia University and a BS in Mathematics and Statistics from Bristol University. She spent three years as a risk manager for Morgan Stanley’s institutional equity derivatives desk in New York. In 2007, Persella set up Meritkapital, an FCA and CySEC licensed investment firm with an initial focus on asset management and investment advice. Since, she has progressively grown the firm’s product offerings to include proprietary trading, brokerage, custody and the underwriting business and has worked towards building the firm’s global presence. Persella has developed the firm’s niche in the Eurobond fixed income space, particularly in emerging markets including Russia and the CIS. Her strong relationships with large buy side funds are testament to the positioning of Meritkapital in its field of expertise. INVESTMENT ADVISOR LADI OLUWO began his career as a commodities trader with institutions both in London, most recently with Commodities Spectrum Ltd, and in Nigeria, at Knights Capital Ltd, where he built a local buy side network. In 2014, he joined Renaissance Capital Limited in London to set up the Sub- Sahara Africa (SSA) Trading operation of the Fixed Income Desk. He was responsible for identifying fixed income trading opportunities from the regions and advising institutional clients accordingly. Subsequently, he joined MeritKapital Ltd to develop a similar effort. He holds a degree in Mathematics and Statistics with Finance from Queen Mary University of London and the Investment Management Certificate (IMC). CySEC #LPAIF05/2014
Team Members INVESTOR RELATIONS TATIANA KOZLOVA joined MeritKapital in 2013. Prior, she spent two years as a salesperson for Anixter, a Fortune 500 company focused on telecom & security. Tatiana has been instrumental in building the firm’s sales desk, particularly in Russia and the CIS. In 2015, she led MeritKapital’s involvement as co-underwriter on a Kazakh Eurobond issue of a subsidiary of “ KazTransGas. ” ; the deal was well publicized as it was the first issue to be denominated in Kazakh tenge and be settle-able in Euroclear. Tatiana has an undergraduate degree in Financial Management from Belgorod University of Cooperation, Economics and Law in Russia and holds the CySEC MOF exams, where she ranked in the top 10 th percentile. COMPLIANCE OFFICER NOMSA CHIZHOWEZHA holds a Master’s Degree from the BPP University in London with a focus on Financial Regulations. Her previous work experience includes being a County Court Advocate and she has been called to the Bar of England and Wales in October 2017. Since joining MeritKapital she has taken lead in implementing compliance projects such as GDPR, FATCA regime and MiFID II. Miss Chizhowezha has proven to be outstanding in both practical and theoretical application of the law and has been appointed to be the compliance officer for MeritKapital Ltd. since passing the CySEC Advanced examination. CySEC #LPAIF05/2014
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