Investment summary

ACD is a closed-ended investment vehicle that offers exposure to a focused range of predominantly debt-oriented strategies, particularly distressed debt strategies, via a portfolio of carefully selected hedge funds. ACD gives exposure to some underlying managers with very strong track records, and whose funds are either closed to new investment or otherwise difficult to access. It does so at a c 20% discount to NAV despite the prospect of a winding up vote in 2014. We expect continuing investment opportunities for successful debt managers, particularly in the area of distressed corporate restructuring over the next two to three years.

Last updated on 30/03/2012

Industry outlook

Distressed debt strategies often perform best when assets can be bought from forced sellers (for regulatory, sentiment, or financial reasons) at prices below intrinsic value. Corporate distress has been soothed by low interest rates and debt reduction. But the debt burden has largely passed sovereign borrowers (directly and by their implicit support for still leveraged banks, especially in Europe). The environment would appear to offer good opportunities for distressed and special situations investing.

Last updated on 29/03/2012