BLACKROCK ABSOLUTE RETURN STRATEGIES LTD
Interim Management Statement - 3 months to 30 September 2012
To the members of BlackRock Absolute Return Strategies Ltd
This interim management statement has been produced solely to
provide additional information to shareholders as a body to meet
the relevant requirements of the UK Listing Authority's Disclosure
& Transparency Rules. It should not be relied on by any other
party for any other reason.
This interim management statement relates to the period from
1 July 2012 to 30 September 2012, and contains information that
covers this period, and up to the date of publication of this
interim management statement. Please note further detailed
performance information, including the estimated weekly net asset
values are available on the Company's website
www.blackrockinternational.com/ bars/library/literature.
Following approval of the Managed Wind-down by Shareholders on 25 August 2011,
BlackRock Absolute Return Strategies Ltd is managed with the intention of
realising all remaining assets in the Portfolio, in a manner consistent with
the principles of prudent investment management and spread of investment risk,
with a view to returning invested capital to the Shareholders in an orderly
manner.
Stock Performance
Cumulative Performance:
30 September 30 June 31 March 31 December
2012 2012 2012 2011
GBP Shares*
Share Price £9.00 £9.56 £8.92 £9.31
Net Asset Value per share £9.66 £9.80 £10.07 £9.95
Discount 6.83% 2.45% 11.42% 6.43%
* the Euro and US Dollar denominated share classes were merged
into the Sterling denominated share class on 9 March 2012.
Manager's Review
US and European monetary policy announcements helped to ease
investor concerns over lurking macroeconomic risks, generally
driving valuations of risk assets higher in the third quarter. The
President of the ECB expressed a willingness to "do whatever it
takes" to support the financial stability of the Eurozone.
Meanwhile, the Fed launched its third major quantitative easing
program in an attempt to accelerate tepid US economic growth.
Material Events & Transactions
There were no material events or transactions, except as
disclosed, during the three months to 30
September 2012, nor was the Company involved in any other
material transactions during the period except as disclosed
herein.
Monthly and Quarterly Reports
The Company continued to publish monthly and quarterly updates
during the period, copies of which were also submitted to the
National Storage Mechanism.
Liquidity Update
The following announcement was released on 19 November 2012:
Company Update - Liquidity Profile
The Board of Directors is providing shareholders with an
estimate of the current liquidity profile of the portfolio of
BlackRock Absolute Return Strategies Ltd (the "Company"). This
liquidity profile relates to the availability of funds without
taking into consideration issues of portfolio balance. Generally,
certain strategies such as Long/Short Equity are more liquid than
other strategies, such as Distressed investing. In order to
maintain portfolio balance, it may be deemed advisable to
effectuate liquidity in a balanced manner rather than the most
expeditious manner. This may lead to a slower pace of actualized
monetizations as compared to the table below.
The table below sets forth the Company's current estimate of the
earliest possible redemption date schedule for the Company's
portfolio. It summarises the liquidity of remaining investments as
well as taking into account available cash and cash receivables
held in the portfolio. The liquidity analysis assumes that: (1)
where redemption notices are currently placed, it is assumed
redemption proceeds will be received in the normal course following
the applicable redemption date; (2) for portfolio holdings for
which redemption is possible but redemption notices have not yet
been placed due to the balanced manner in which the wind-down is
being managed, and taking into consideration lock-ups, fund-level
gates that are currently implemented and any investor-level gates,
as applicable, it is assumed that redemption notices have been
placed at 1st November 2012 and
proceeds will be received in the normal course following the
applicable redemption date(s); (3) for portfolio holdings that are
either in side-pockets, suspended or liquidating, redemption dates
are estimated based on the Investment Manager's current
understanding of the underlying fund's targeted date(s) for lifting
its suspension or paying out proceeds, as applicable. In each case,
actual receipt of proceeds will follow the corresponding redemption
date.
Date Cumulative Redemption
30th November 2012 40.4%
31st December 2012 65.8%
31st March 2013 68.2%
30th June 2013 71.8%
30th September 2013 75.0%
31st December 2013 80.6%
31st December 2014 91.1%
The above liquidity schedule is based on the Company's portfolio
investments and related estimated net asset values as of
1st November 2012(1), and actual or
anticipated changes in liquidity (gates, side pockets, suspension
or liquidation) that have been communicated to the Investment
Manager by the underlying funds.
Actual proceeds would be expected to be received following the
relevant redemption date in accordance with the underlying fund's
stated terms, generally within 60 days (with the exception of
proceeds held back until the completion of the applicable annual
audit), although where liquidity is constrained, receipt might be
further delayed. Other factors, including future events, may affect
the Company's ability to redeem its holdings in accordance with the
estimated timeframes set out above, as well as the availability,
amount or timing of receipt of redemption proceeds.
The above details of the Company's estimated portfolio liquidity
profile are indicative only and should not under any circumstances
be considered a prediction, forecast or guarantee of the Company's
actual portfolio liquidity profile or an indication as to the
timing of distributions to shareholders pursuant to the managed
wind-down of the Company's portfolio which was approved by
shareholders on 25 August 2011. In
addition, there is no guarantee that the Company's assets will be
realized at their net asset value, and it is possible that the
Company may not be able to realize some of its assets at any
value.
Notes:
(1) The above liquidity schedule is based on the estimated US
dollar net asset
values communicated to the Investment Manager by the underlying funds. These
estimated net asset values do not take into account the potential impact of the
Company's currency hedging policy. Currency fluctuations may impact materially
the actual redemption proceeds available for distribution to shareholders.
Second Redemption
At the close of business on 6 July
2012, 55.9% of the Company's issued share capital was
redeemed. The payment made to Shareholders and the number of shares
redeemed were as follows:
Number of shares Resulting shares Amount paid per
redeemed outstanding share
Sterling denominated
shares 1,806,516 1,428,138 £10.1096
Third Redemption and Cancellation of the Company's Listing
The Company released the following announcement on 16 November 2012:
Redemption of Shares
Further to the powers granted to the Board at the Company's
extraordinary general meeting in August
2011, the Company today announces that approximately 35.26
per cent. of the Company's issued share capital will be redeemed at
close of business on 23 November 2012
(the "Redemption Date") by way of a compulsory partial redemption
of shares by reference to the unaudited estimated monthly NAV of
the Company as at 31 October 2012 of
£9.71 per Share (the "Third Redemption").
The Third Redemption will be effected pro rata to holdings of
shares on the register at the close of business on the Redemption
Date (which is the record date for the purposes of the Third
Redemption), being 23 November 2012.
The payments made to shareholders in respect of redeemed shares
will be as follows:
GBP4,889,439 to the Sterling share
class (equivalent to £9.71 per share)
Fractions of Shares will not be redeemed and so the number of
shares to be redeemed for each shareholder will be rounded down to
the nearest whole number of shares. The amount to be applied to the
partial redemption of shares comprises the monies from the
realisation of the Company's investments to be received up to and
including 13 November 2012 pursuant
to the winding down of the Company, less any funds used or required
to settle any liabilities (including the estimated ongoing day to
day running costs of the Company and the costs and expenses of this
partial redemption).
As at today's date, the Company has 1,428,138 Sterling shares,
in issue of which none are held in treasury. All of the shares
redeemed on the Redemption Date will be cancelled.
The Company's Shares will be disabled in CREST on the Redemption
Date and the existing ISIN number JE00B8BKNL68 (Sterling) will
expire. The new ISIN number JE00B705MR41 (Sterling) in respect of
the remaining Shares which have not been redeemed will be enabled
and available for transactions from and including 26 November 2012. Up to and including the
Redemption Date, Shares will be traded under the old ISINs and as
such, a purchaser of such Shares would have a market claim for a
proportion of the redemption proceeds. CREST will automatically
transform any open transactions as at the Redemption Date into the
New ISINs.
Cancellation of the Company's listing
Since the announcement on 28 June
2012, the Board of BlackRock Absolute Return Strategies Ltd
has continued to monitor the cost efficiency and benefits of
retaining the Company's listing during the managed wind-down
process. Given the resulting size of the Company following this
third redemption, the Board announces that an extraordinary general
meeting (EGM) shall be convened to consider the cancellation of the
admission of ordinary shares to the Official List and to trading on
the London Stock Exchange's Main Market for listed securities. Such
cancellation is expected to become effective, subject to
shareholder approval at the EGM, in early January 2013. A shareholder circular and formal
notice in respect of the EGM will posted to shareholders as soon as
practicable with a view to holding the meeting in December 2012. The meeting will be held at One
Waverley Place, Union Street, St Helier Jersey JE2 3RF. The time
and date of the meeting will be confirmed in the notice.
Half Yearly Financial Report
The Company announced its half yearly financial results for the
period ended 30 June 2012 on
22 August 2012.
The Board is not aware of any material events or transactions,
except as disclosed herein, occurring between 1 July 2012 and the date of publication of this
interim management statement which would have a material impact on
the financial position of the Company.
BlackRock (Channel Islands) Limited
Secretary
Date: 19 November 2012