Black Crane’s special situation investments accelerate year-to-date returns
Asia-ex Japan equity focused Black Crane Asia Opportunities Fund gained 1.04% in August after a 5.6% rise in July, taking the return so far this year to 15.64%.
The Fund benefited from a number of equity special situation investments, including in agri-business solutions provider Elders, where Black Crane is a substantial hybrid security holder.
'The company was coming out of a period of restructuring of its balance sheet and improvements in the underlying business. This has resulted in a doubling of the value of the hybrid securities and we remain invested,' said industry veteran Peter Kennan, portfolio manager of Black Crane.
Part of Black Crane’s investment in Elders was made at the firm’s most distressed point when the stock price was trading at $8. The stock price has since then rebounded to $41.
The fund also got a boost from Jaya Holdings, which owns and charters supply vessels for the offshore sector. Jaya’s strong performance this year more than doubled the return on the fund’s investment in the period.
Kennan, a former investment banker at UBS, leverages on his corporate finance skills and network to indentify and create value from a number of his equity special situations investments. Black Cranes’ superior returns that are uncorrelated to the market differentiate it from peers.
'We are in a stage of substantial growth in assets as a result of our attractive returns over the past two to three years. The fund has compounded at a net return in excess of 16% since January 2012,'said Kennan.
Going forward, Kennan expects continued positive performance amid a wealth of investment opportunities. 'We focus on generating returns in all market conditions based on idiosyncratic investments,' he added.
Peter Kennan, Black Crane Capital: In-depth Idea Presentation
Peter Kennan is Managing Partner and CIO of Black Crane Capital. He has 15 years of corporate finance experience across a diverse range of sectors and transactions with UBS Asia and Australia. With UBS, Peter was formerly the Head of Asian Industrials Group for UBS Asia, a corporate finance sector team covering energy, infrastructure, resources, consumer/retail and general industrial companies. He achieved number 1 team rating in Asia with revenues of US$400m in 2007, grown from just US$20m over a four year period. Peter was also the Head of Telecoms and Media sector team for UBS Australia specializing in M&A, advising on many large, complex transactions. Prior to UBS, Peter spent 7 years with BP in a variety of engineering and commercial roles.