REG - BlueCrest AllBlueFdBlueCrest AllBlueFdEBlueCrest AllBlueUS - Half Yearly Report <Origin Href="QuoteRef">BABS.L</Origin> <Origin Href="QuoteRef">BABSu.L</Origin> <Origin Href="QuoteRef">BABSx.L</Origin> - Part 3
29/10/2014 15:53
- Part 3: For the preceding part double click ID:nRSb1736Qb
Portfolio cost brought forward 611,184,594 13,635,470 62,297,403 660,134,815
Unrealised appreciation on valuation brought forward 149,287,016 1,780,001 4,734,981 153,625,105
Valuation brought forward 760,471,610 15,415,471 67,032,384 813,759,920
Movements in the period:
Gross share conversions in the period (1,982,010) (1,235,179) 4,953,182 -
Adjustment for realised gain on share conversions 1,057,157 282,465 134,173 1,361,728
Purchases at fair value - 50,000 440,000 297,249
Sales (31,861,326) - - (31,861,326)
Exchange losses on currency balances - - - (1,690,819)
Portfolio cost carried forward 578,398,415 12,732,756 67,824,758 628,241,647
Unrealised appreciation on valuation carried forward 172,435,130 2,119,387 7,499,933 178,516,249
Valuation carried forward 750,833,545 14,852,143 75,324,691 806,757,896
Realised gains on sales 9,195,831 282,465 134,173 9,500,402
Increase in unrealised appreciation 23,148,114 339,386 2,764,952 24,891,144
Net gain on financial assets at fair value through profit or loss 32,343,945 621,851 2,899,125 34,391,546
As at 31 December 2013
Ordinary Shares
Sterling Share Class Euro Share Class US DollarShareClass Total
£ E $ £
UNQUOTED FINANCIAL ASSETS
Portfolio cost brought forward 668,703,360 15,138,381 117,875,452 753,532,739
Unrealised appreciation on valuation brought forward 187,498,544 2,160,466 14,879,068 198,408,946
Valuation brought forward 856,201,904 17,298,847 132,754,520 951,941,685
Movements in the year:
Gross share conversions in the year (36,490,145) (2,642,579) 58,973,129 -
Adjustments for realised gains on share conversions 12,757,236 530,302 1,461,736 14,080,500
Purchases at fair value 121,140,944 1,808,018 20,699,971 135,144,743
Sales (154,926,801) (1,198,652) (136,712,887) (238,493,326)
Exchange gains on currency balances - - - (4,129,841)
Portfolio cost carried forward 611,184,594 13,635,470 62,297,403 660,134,815
Unrealised appreciation on valuation carried forward 149,287,016 1,780,001 4,734,981 153,625,105
Valuation carried forward 760,471,610 15,415,471 67,032,384 813,759,921
Realised gains on sales 52,120,798 603,707 9,470,268 58,341,971
Decrease in unrealised appreciation (38,211,528) (380,465) (10,144,087) (44,783,841)
Net gains / (losses) on financial assets at fair value through profit or loss 13,909,270 223,242 (673,819) 13,558,130
As at 30 June 2014
Ordinary Shares
Sterling Share Class Euro Share Class US DollarShareClass Total
£ E $ £
QUOTED FINANCIAL ASSETS
Portfolio cost brought forward 1,170,881 - - 1,170,881
Unrealised appreciation on valuation brought forward 3,606 - - 3,606
Valuation brought forward 1,174,487 - - 1,174,487
Movements in the year:
Purchases at fair value - - - -
Sales - - - -
Portfolio cost carried forward 1,170,881 - - 1,170,881
Unrealised appreciation on quoted investment valuation carried forward 4,601 - - 4,601
Valuation carried forward 1,175,482 - - 1,175,482
Realised gains on sales - - - -
Increase in unrealised appreciation 995 - - 995
Net gains on financial assets at fair value through profit or loss 995 - - 995
As at 31 December 2013
Ordinary Shares
Sterling Share Class Euro Share Class US DollarShareClass Total
£ E $ £
QUOTED FINANCIAL ASSETS
Portfolio cost brought forward 2,219,610 - - 2,219,610
Unrealised appreciation on valuation brought forward 2,671 - - 2,671
Valuation brought forward 2,222,281 - - 2,222,281
Movements in the year:
Purchases at fair value - - - -
Sales (1,048,729) - - (1,048,729)
Portfolio cost carried forward 1,170,881 - - 1,170,881
Unrealised appreciation on quoted investment valuation carried forward 3,606 - - 3,606
Valuation carried forward 1,174,487 - - 1,174,487
Realised gains on sales 1,271 - - 1,271
Increase in unrealised appreciation 935 - - 935
Net gains on financial assets at fair value through profit or loss 2,206 - - 2,206
IFRS 13 requires fair valueto be disclosed by the source of inputs, using a three-levelhierarchy:
· Quotedprices (unadjusted) in active markets foridentical assets or liabilities (Level 1);
· Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, eitherdirectly
(as prices)or indirectly (derivedfrom prices) (Level 2);and
· Inputs for the asset or liability that are not based on observable market data (unobservable inputs) (Level 3).
The fair value of the investments held by the Company are based on the published NAV of the underlying investments in
AllBlue Limited, AllBlue Leveraged Feeder Limited and the ICS Funds. On the basis thatthe significant input to the fair
value is observableand no unobservable adjustments are made to the valuations, the Company categorises allthese investments
as Level 2.
Details of the value of the classifications are listed in the table below. Values are based on the market value of the
investments as at the report date:
Financial assets at fair value through profit or loss Fair Valueas at 30 June 2014 Fair Valueas at 31 December 2013
GBP GBP
Level 1 - 1,174,487
Level 2 807,933,378 813,759,921
The ICS Fund investments have been transferred to Level 2 of the fair value hierarchy during the period, as the Directors
noted they are capable of redemption in a primary market with the issuer and so believe that since the investments are NAV
based funds their fair value should be based on inputs other thanthe quoted prices that areobservable directly.
8 RECEIVABLES
30 June 2014
Ordinary Shares
Sterling Share Class Euro Share Class US DollarShareClass Elimination Total
£ E $ £ £
Prepayments 57,734 1,106 5,623 - 61,907
Inter class loan accounts - 3,223 17,438 (12,774) -
57,734 4,329 23,061 (12,774) 61,907
31 December 2013
Ordinary Shares
Sterling Share Class Euro Share Class US DollarShareClass Elimination Total
£ E $ £ £
Prepayments 47,225 926 4,041 - 50,435
Inter class loan accounts - 35,199 329,909 (228,489) -
47,225 36,125 333,950 (228,489) 50,435
9 PAYABLES (AMOUNTS FALLING DUE WITHIN ONE YEAR)
30 June 2014
Ordinary Shares
Sterling Share Class Euro Share Class US DollarShareClass Elimination Total
£ E $ £ £
Accrued administration fees 15,456 296 1,505 - 16,573
Accrued broker fees 12,958 248 1,262 - 13,894
Accrued registration fees 6,342 121 618 - 6,800
Accrued audit fees 11,792 226 1,148 - 12,644
Accrued printing costs 9,216 177 898 - 9,883
Inter class loan accounts 12,774 - - (12,774) -
Other sundry accruals 57,342 1,098 5,585 - 61,486
125,880 2,166 11,016 (12,774) 121,280
31 December 2013
Ordinary Shares
Sterling Share Class Euro Share Class US DollarShareClass Elimination Total
£ E $ £ £
Accrued administration fees 16,116 310 1,360 - 17,195
Accrued broker fees 17,809 349 1,524 - 19,019
Accrued registration fees 8,679 170 743 - -
Accrued audit fees 23,753 466 2,032 - 25,367
Accrued printing costs 10,364 203 887 - 11,068
Inter class loan accounts 228,489 - - (228,489) -
Other sundry accruals 31,940 627 2,733 - 34,111
337,150 2,125 9,279 (228,489) 106,761
10 SHARE CAPITAL
Authorised
An unlimited number of Unclassified shares of no par value each.
Issued
Sterling Share Class
Ordinary Shares
Euro Share Class
US Dollar
Share
Class Total
Number of shares inissue at 30
June 2014 406,241,849 8,094,527 41,414,369
455,750,745
The movement inshares took place as follows:
Date of movement
Number of Sterling Share Class
Ordinary Shares Number of Euro Share
Class
Number of
US $ ShareClass
Sub-totalbrought forward as at 1
January 2013 479,354,793 10,304,993 80,041,527
Conversion 1 January 2013 (664,956) (1,148,538) 2,661,147
Conversion 1 February 2013 (14,935) 194,925 (242,450)
Conversion 1 March 2013 (21,239,294) (129,625) 33,910,998
Purchase / cancellation of treasury shares in the quarter ended 31
March 2013 (10,023,943) -
-
Conversion 1 April 2013 (3,480,521) 153,631 5,339,216
Conversion 1 May 2013 (1,407,608) 36,710 2,238,869
Conversion 1 June 2013 3,616,627 (724,570) (4,797,613)
Purchase of treasury shares in the
quarter ended 30 June 2013 (2,041,925) - -
Conversion 1 July 2013 2,067,906 - 1,200,508
Redemption 1 July 2013 - - (75,413,387)
Conversion 1 August 2013 103,378 (90,000) (43,767)
Conversion 1 September 2013 983,478 (1,028) (1,769,650)
Purchase / cancellation of treasury shares in the quarter ended 30
September 2013 (3,725,000) - (4,489,504)
Conversion 1 October 2013 8,473 - (15,944)
Conversion 1 November 2013 (271,115) 215,380 159,556
Conversion 1 December 2013 243,143 (39,814) (361,448)
Purchase / cancellation of treasury shares in the quarter ended 31
December 2013 (11,981,539) - 178,559
As at 31 December 2013 431,526,962 8,772,064 38,596,617
The movement in shares took place as follows:
Date of movement
Number of Sterling Share Class
Ordinary Shares
Number of Euro Share Class
Number of USDollar Share Class
Sub-totalbrought forward as at 1
January 2014 431,526,962 8,772,064 38,596,617
Conversion 1 January 2014 (96,737) 262,271 (196,248)
Conversion 1 February 2014 (888,267) (7,207) 1,536,886
Conversion 1 March 2014 (178,470) (91,260) 439,933
Purchase / cancellation of treasury
shares in the quarter ended 31 March 2014
(11,366,000) - -
Conversion 1 April 2014 (338,491) (399,570) 1,145,489
Conversion 1 May 2014 43,769 (55,246) -
Conversion 1 June 2014 365,067 (386,525) (108,308)
Purchase / cancellation of treasury
of shares in the quarter ended 30 June 2014
(12,825,984) - -
As at 30 June 2014 406,241,849 8,094,527 41,414,369
As explained in Note 1(j) above the share classes have been recognised as liabilities.
In the event of a return of capital on a winding-up or otherwise, Shareholders are entitledto participate in the
distribution of capital after paying all the debts and satisfying all the liabilities attributable to the relevantshare
class.
The holders of shares of the relevant share class shall be entitled to receive by way of capital any surplus assets of the
share class in proportion to their holdings. In the event that the share class has insufficient funds or assets to meet all
the debt and liabilities attributable to that share class, any such shortfall shall be paid out of funds or assets
attributable to the other share classes in proportion to the respective net assets of the relevant share classes as at the
date of winding-up.
The Company's Articles incorporate a discount management provision (which applies to each class of OrdinaryShares
individually) that will require a continuation vote to be proposed in respect of the particularclass of Ordinary Shares at
a class meeting of the relevant shareholders (by way of ordinary resolution)if, over the previous 12 month rolling period
commencing from 1 January 2008, the relevant class of Ordinary Shares has traded, on average (calculated by averaging the
closing mid-market share price on the dates which are 5 Business Days after the date on which each estimated PublishedNAV
announcement is made foreach NAV Calculation date over the period) at a discountin excess of 5 per cent to the average NAV
per Ordinary Share of that class (calculated by averaging the NAV per Ordinary Share ofthat class as atthe NAV Calculation
Date at the end of each monthduring the period).
In the event that a vote to continue is proposed and passed for any class of Ordinary Shares as a result of the operation
of such mechanism, no further continuation vote will be capable of beingproposed for that class for a further12 months from
the date of the passing of the continuation resolution.
If such continuation vote is not passed, the Directors will be required to formulate redemption proposals to be put to the
Shareholders of that class offering to redeem their Ordinary Shares atthe relevant published NAV on the NAV Calculation
Date immediately preceding such redemption (less the costs of all such redemptions). However,where one or more such
resolutions in respect of the same period is/are not passed and the class(es) of Ordinary Shares involved represent 75 per
cent, or more of the Company's net assets attributable to all Ordinary Shares at the last NAV Calculation Date on or
immediately preceding the date of the latestcontinuation resolution being defeated,the Directors may first (at their
discretion) put forward alternativeproposals to all shareholders to offer to repurchase their Sharesor to reorganise,
reconstructor wind up the Company. If, however,such alternative proposals are not passed by the necessary majority of
shareholders of the relevant class, the Directors must proceed to offer to redeem the relevant class(es) of Ordinary Shares
on the terms described above.
Where following redemption of any class of Ordinary Shares under the discount management provision, the number of Ordinary
Shares of that class remaining in issue represent less than 25 per cent, of the Ordinary Shares of that class in issue
immediately before such redemption or the listing for such class of Ordinary Shares on the Official List is withdrawn or
threatened to be withdrawn or the Directors determine that the conditions for the continued listingof that class are not
(or they believe will not be) met, then the Company may redeem the remaining issued Ordinary Shares of that class within
three months of such determination at a redemption price equal to the NAV of the Ordinary Shares of that class on the NAV
Calculation Date selected by the Directors for such purpose (less the costs of such redemption).
11 SHARE PREMIUM
In April 2006 the Shareholders of the company passed a resolution to cancel the amount standing to the credit of the
Company's share premium account (less any formation expenses set off against the share premium account) and the Directors
obtainedfrom the Court in Guernsey an order confirming such cancellation of the share premium account in accordance with
the Companies (Guernsey) Law, 1994 (as amended) (the "1994 Law"). The reserve created was thereafter available as
distributable profits to be used for all purposes permittedby the 1994 Law,including thebuy back of sharesand the paymentof
dividends.
On 1 July 2008, the 1994 Law was replacedby The Companies (Guernsey) Law, 2008 (as amended) (the "2008 Law"). The 2008 Law
does not require share premium to be held in a separate account and any premium at which shares are issued can be used for
all purposes, including the buy back of Shares and the payment of dividends, providedthat the Company would after any
distribution still meet the statutory Solvency Test as such is defined in the 2008 Law. Accordingly, upon the issue of C
Shares in August 2008, December 2009 and June 2010 the entire amount of share premium received on the issue of such C
Shares was immediately transferred to distributable reserves.
12 TREASURY SHARES
30 June 2014
Sterling Share Class
Ordinary Shares
Euro Share Class
US Dollar
Share
Class Total
£ E $
Balance as at 1 January 2014 82,314,408 - 7,364,937 86,762,640
Acquired during the period 44,929,822 - -
44,929,822 Cancelled during the period (47,294,746)
- (7,364,937) (51,742,978)
Balanceas at 30 June 2014 79,949,483 - -
79,949,483
31 Dec 2013 (restated)
Sterling Share Class
Ordinary Shares
Euro Share Class
US Dollar
Share
Class Total
£ E $
Balanceas at 1 January 2013 32,344,190 - -
32,344,190
Acquired during the year 49,970,219 - 7,678,626
54,607,910 Cancelled during the period -
- (313,689) (189,460)
Balance as at 31 December 2013 82,314,408 - 7,364,937
86,762,640
The treasury shares reserve represents 45,090,789 (2013: 46,276,336) Sterling Shares and nil (2013: 4,310,945) Dollar
Shares purchased in the market at various prices per share ranging from £1.752 to
£1.8277 for Sterling Shares and held by the Company in treasury. Cancellation of 25,377,547 (2013: nil) Sterling Shares and
4,310,945 Dollar Shares (2013: 183,422) took place in the period.
During the period, the Company bought back 24,192,000 (2013: 27,772,407) Sterling Shares with an average price of
£1.7899(2013: £1.7231) and discount of 5.0% (2013:5.6%) to NAV. During the period, the Company did not buy back any Dollar
Shares (2013: 4,494,367 Shares at an average price of $1.7035 and discount of 0.29%to NAV).
13 DISTRIBUTABLE RESERVES
30 Jun 2014
Sterling Share Class
Ordinary Shares
Euro Share Class
US Dollar
Share Class
Total
£ E $ £
Balance as at 1 January 2014 870,307,904 15,454,948 74,776,375 928,315,440
Increase in net assets attributable to shareholders afterother
comprehensive income 34,253,654 614,892 2,863,702
34,549,715 Adjustment to allocation of
reserves brought forward 143,067 (25,487) (205,674)
-
Treasury shares cancelled during
the period (47,294,746) - (7,364,937)
(51,742,978)
Accretive gain transfer between
share classes (353,880) 79,103 464,394
- Share conversions (1,982,009) (1,235,179)
4,953,182 -
Balance as at 30 June 2014 855,073,989 14,888,277 75,487,042 911,122,176
31 Dec 2013 (restated)
Sterling Share Class
Ordinary Shares
Euro Share Class
US Dollar
Share Class
Total
£ E $ £
Balance as at 1 January 2013 891,800,439 17,825,583 137,112,821 990,649,916
Increase / (decrease) in net assets attributable to shareholders after
other comprehensiveincome 15,398,037 210,499 (732,517)
10,821,434 Adjustment to allocation of
reserves brought forward (195,986) 24,122 274,722
-
Treasury shares cancelled during
the period - -
(313,689) (189,460)
Accretive gain transfer between
share classes (204,440) 37,323 272,459
- Partial redemption of share class - -
(120,810,551) (72,966,450) Share conversions (36,490,145)
(2,642,579) 58,973,129 -
Balance as at 31 December 2013 870,307,904 15,454,948 74,776,376 928,615,440
14 FINANCIAL INSTRUMENTS
The Company's main financial instruments comprise:
(a) Cash and cash equivalents that arisedirectly from the Company's operations;
(b) Shares held in AllBlueand AllBlue Leveraged; and
(c) Shares held in ICS
(a)
15 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
The main risks arising from the Company's financial instruments concern its holding of shares in AllBlue and AllBlue
Leveraged and the risks attaching to those shares which are market price risk, credit risk, liquidity risk, interest rate
risk and increased volatility due to leverage employed by the Underlying Funds as explained below.
The Company is not exposed directly to material foreign exchange risk as each class of Shares in the Company is directly
invested in shares of AllBlueand AllBlue Leveraged denominated in the same corresponding currency.
So far as the Company is concerned, the only risk over which the Board can exercise direct control is the liquidity risk
attaching to its ability to realise shares in AllBlue, AllBlue Leveraged and ICS for the purpose of meeting share buybacks
and ongoing expenses of the Company. For this purpose the Board have created the Cash Reserve (explained in 1(g)) to
provide funds to enable the Company to settle share buy backs and meet its expenses in the ordinary course of business.
Thereafter the Board recognises that the Company has via its holding of shares in AllBlue, AllBlueLeveraged and ICS an
indirect exposure to the risks summarised below.
For the shares held in the ICS Funds the Board notes that such shares may be realised on short notice on any business day
with proceeds in respect thereof usuallybeing transmitted by telegraphic transfer on the business day following receipt of
the redemption notice by the ICSFund subject to cut-off times depending on the specific ICS Fund in which shares are
beingredeemed.
It must also be noted that there is little or nothing which the Board can do to manage each of theother risks
withinAllBlue, AllBlue Leveraged or the Underlying Funds in whichAllBlue and AllBlue Leveraged invest (the "Underlying
Fund(s)"), under the current investment objective of theCompany.
(a) Price Risk
The success of the Company's activities will be affected by general economic and market conditions, such as interest rates,
availabilityof credit, inflation rates, economic uncertainty, changes in laws, trade barriers, currency exchange
controlsand national and international political circumstances. These factors may affect the level and volatility of
securities' prices and the liquidity of the Underlying Funds' investments. Volatility or illiquidity could impair the
Underlying Funds'profitability or resultin losses.
Details of theCompany's Investment Objectivesand Policy aregiven above.
Price sensitivity
The Company invests substantially all its assets in AllBlue, AllBlue Leveraged and ICS and does not undertakeany structural
borrowing or hedging activity at the Company level. Its performance is thereforedirectly linked to the NAV of AllBlue,which
itself is driven by the NAVs of the Underlying Funds, each of which hold a large number of positions in listed and unlisted
securities.
At 30 June 2014, (31 December 2013 for comparative) if the NAV of AllBlue, AllBlue Leveraged and ICS had been 10%
higher/lower with all the other variables held constant, the net assets attributable to Shareholders for the period would
have increased/decreased as stated below, arising due to the increase in the fair value of financial assets at fair value
through profit or loss.
Increase in net assets attributable toshareholders
Decrease in net assets attributable toshareholders
30 Jun 2014 31 Dec 2013 30 Jun 2014 31 Dec 2013
Sterling Shareholders 75,200,903 76,164,709 (75,200,903) (76,164,709)
Euro Shareholders 1,485,214 1,541,547 (1,485,214) (1,541,547)
USDollar 7,532,469 6,703,238 (7,532,469) (6,703,238)
Shareholders
Total 84,218,586 84,409,495 (84,218,586) (84,409,495)
The sensitivityis higher in 2014 than in 2013 because of the increase in the net financial assets andliabilities at
fairvalue through profitor loss at thereporting date.
(a) Credit Risk
The nature of commercial arrangements made in the normal course of business between many prime brokers and custodians means
that in the case of any one prime broker or custodian defaulting on its obligations to AllBlue, AllBlue Leveraged or any of
the Underlying Funds, the effects of such a default may have negative effectson other prime brokers with whom AllBlue,
AllBlue Leveraged or such UnderlyingFund deals. The Underlying Funds and, byextension, AllBlue, AllBlue Leveraged and the
Company may, therefore, be exposed to systemic risk when AllBlue and AllBlueLeveraged or an Underlying Fund deals with
prime brokers and custodians whose creditworthiness may be interlinked.
The assets of Underlying Funds or AllBlue Leveraged may be pledged as margin with prime brokers or other counterparties or
held with prime brokers or banks. In the event of the default of any ofthese prime brokers, banks or counterparties,
AllBlue, AllBlue Leveraged and
ICS or the Underlying Funds may not receive back all or any of the assets pledged or held with the defaulting party. The
maximum credit risk to which the Company was exposed at the period end was £819,341,799 (Dec 2013: £841,609,127). The main
concentration of risk for the Company relates to the investments in AllBlue, AllBlueLeveraged and ICS.
(b) Liquidity Risk
In some circumstances, investments held by the Underlying Funds of AllBlueand AllBlue Leveraged may be relatively illiquid
making it difficult to acquire or dispose of them at the prices quoted on the various exchanges. Accordingly,an Underlying
Fund's ability to respond to market movementsmay be impaired and, consequently, the Underlying Fund may experience adverse
price movements upon liquidation of its investments which may in turn affect the value of AllBlueand AllBlue Leveraged and
hence the Company's investment in AllBlue and AllBlue Leveraged. Settlement of transactions may be subject to delay and
administrativeformalities.
There can be no assurance that the liquidity of the investments of AllBlue, AllBlue Leveraged and ICS and the Underlying
Funds will always be sufficientto meet redemption requests as, and when, made. Any such lackof liquidity may affect the
ability of the Company to realise its shares in AllBlue, AllBlue Leveraged and ICS and the value of Shares in the Company.
For such reasons AllBlue's, AllBlue Leveraged's and ICS's treatmentof redemption requests may be deferred in exceptional
circumstances including if a lack of liquidity may result in difficulties in determiningthe NAV andthe NAV pershare in
AllBlue. This in turnwould limit theability of
the Directors to realisethe Company's investments in AllBlueand AllBlue Leveraged should they consider it appropriate to do
so and may result in difficulties in determining the NAV of a Share in the Company. There was no gating or suspension of
AllBlue or AllBlueLeveraged during the period under review or in the previous year.
The market prices, if any, for such illiquid investments tend to be volatile and may not be readily ascertainable and the
relevant Underlying Fund may not be able to sell them when it desires to do so or to realise what it perceives to be their
fair value in the event of a sale. The sizeof the Underlying Funds' positions may magnify the effectof a decrease in market
liquidity for such instruments. Changes in overall market leverage, deleveraging as a consequence of a decision by the
counterparties with which the Underlying Funds enter into repurchase/reverse repurchase agreements or derivative
transactions, to reduce the level of leveraging, or the liquidation by other marketparticipants of the same or similar
positions, mayalso adverselyaffect the Underlying Funds' portfolios.
The sale of restricted and illiquidsecurities often requires more time and results in higher brokerage charges or dealer
discounts and other sellingexpenses than does the sale of securities eligible for trading on national securities exchanges
or in the over-the-counter markets.
The Underlying Funds may not be able readily to dispose of such illiquidinvestments and, in some cases, may be
contractually prohibited from disposing of such investments for a specified period of time. Restricted securities may sell
at a price lower than similar securities that arenot subject to restrictions on resale.
The Company's shares in issue are traded on the London Stock Exchange's Main Market for Listed Securities (the "LSE").
However, in certain circumstances there may be a limited market for the shares and it may not be possible for investors to
achieve a liquidationof their holding within a short time period or for the investor to realise the full anticipated value
of the Shares.
The table below details the residual contractual maturities of financial liabilities:
As at 30 June 2014 1-3
months
3-6
Months
Over 1 year Total
£ £ £ £
Net assets at the end of the period attributable to
- 11,919,203 819,253,498 831,172,701
As at 31 December2013 1-3
months
3-6
Months
Over 1 year Total
£ £ £ £
Net assets at the end of the period attributable to
- - 841,552,800 841,552,800
shareholders
Accruedexpenses 106,761 - - 106,761
Total 106,761 841,552,800 841,659,561
(c) Interest Rate Risk
The prices of securities tend to be sensitive to interest rate fluctuations. Unexpected fluctuations in interest rates
could cause the corresponding prices of long positions and short positions adopted to move in directions which were not
originally anticipated. Generally, an increase in interest rates will increasethe carrying costs of investments.
However,the Company's investments designated as at fair value throughprofit or loss are non interest bearing, and therefore
are not directly exposed to interest rate risk.
The Company's own cash balances are not materially exposedto interest rate risk as cash and cash equivalents are held on
floating interest rate deposits with banks and the Company does notrely on incomefrom bank interest tomeet day to
dayexpenses.
(d) Leverage by Underlying Funds
Certain Underlying Funds in which the Company may have an economic interest operate with a substantial degreeof leverage
and are not limited in the extent to which they either may borrow or engage in margin transactions.The positions maintained
by such Underlying Funds may in aggregate value be in excess of the NAV of AllBlueand AllBlue Leveraged. This leverage
presents the potential for a higher rate of total return but will also increase the volatility of AllBlue, AllBlue
Leveraged and, as a consequence, the Company, including the risk of a totalloss of theamount invested.
(e) Leverage by AllBlue Leveraged
AllBlue Leveraged operates with a substantial degree of leverage for the purposes of making investments and is not
limitedin the extent to which they either may borrow or engage in margin transactions (although it is expected to be an
amount equal to approximately 50 per cent of AllBlue Leveraged's NAV). This leverage presents the potential for a greater
rate of total returnbut will also increase exposure tocapital risk andinterest costs.
(f) Capital management
The investment objective of the Company is to provideShareholders with consistent long- term capital growth through an
investment policy of investingsubstantially all of its assets in AllBlue or any successor vehicle toAllBlue.
As the Company's Ordinary Shares are traded on the LSE, the OrdinaryShares may trade at a discount to their NAV per share.
However, in structuring the Company, the Directors have given detailed consideration to thediscount risk and howthis may be
managed.
At the last Annual General Meetingheld pursuant to section 199 of 2008 Law, the Directors were granted authority to buy
back up to 14.99 per cent of the OrdinaryShares in issue. The Company's authorityto make purchases of its own issued
Ordinary Shares will expire at the conclusion of the next general meeting of the Company to be held pursuant to section 199
of the 2008 Law and renewal of such authority will be sought at the next general meeting. The timing of anypurchases will
be decided by the Board.
The Directors intend that purchases will only be made pursuant to this authority through the market, for cash, at prices
below the prevailingNAV per Share where the directors reasonably believesuch purchases will be of material benefitto the
Company.
Following approval of the Court in Guernsey, the Company resolved to cancel the amount standing to the credit of its share
premium account following Admission.The amount released on cancellation has been credited as a distributable reserve in
the books of account and may be used by the Company for the purpose of funding purchases of its Ordinary Shares as
described above and the payment of dividends.
On 1 July 2008 The Companies (Guernsey) Law, 1994 (as amended) was replacedby the 2008 Law. The 2008 Law does not require
share premium to be held in a separate account andany premium at which shares are issued can be used for all purposes,
including the buy backof Shares and the paymentof dividends, provided that the Company would after any distribution still
meet the statutory Solvency Test as such is definedin the 2008 Law. Accordingly, upon the issue of C Shares in August 2008,
December 2009 and June 2010 the entireamount of sharepremium received on the issue of such C Shares was immediately
transferred to distributable reserves.
The Company's authorised share capital is such that further issues of new Ordinary Shares could be made, subject to waiver
of pre-emption rights. Subject to prevailing market conditions, the Board may decide to make one or more further such
issues or reissues of Ordinary Shares for cash from time to time. Any further issues of new Ordinary Shares or reissues of
OrdinaryShares held in treasurywill rank pari passu with Ordinary Shares in issue.
There are no provisions of the Companies Laws 2008 which confer rights of pre-emption in respect of the allotment of
Shares. There are, however, pre-emption rights contained in the Articles, but theDirectors have beengranted the powerto
issue 45million further Shareson a non pre-emptive basis for a period concluding on 31 December 2015 unless such power is
revoked by the Company's shareholders in a general meeting pursuant to section 199 of the 2008 Law. The Directors intend to
request that the authority to allot Shares on a non pre- emptive basis is renewed at each subsequent general meetingof the
Company.
Unless authorised by Shareholders, the Company will not issue further Ordinary Shares or reissue Ordinary Shares out of
treasury for cash at a price below the prevailing NAV per Shareunless they are first offered pro rata toexisting
shareholders.
The Company monitorscapital on the basis of the carrying amount of reserves as presented on the face of the Statement of
Financial Position. Capitalfor the reporting periods under review is summarised as follows:
30Jun2014 31Dec2013
GBP GBP
(restated)
Purchaseofownshares (79,949,483) (86,762,640)
Distributablereserves 911,122,184 928,315,440
Total 831,172,701 841,552,800
15 SUBSEQUENT EVENTS
The Company issued a Circular dated 4 August 2014 to its shareholders, inviting them to vote onthe proposed closure of the
Euro Class.
On 27 August 2014 at an Extraordinary General Meeting and Euro Class meeting, 97.98% of the voting shareholders voted in
favour of the closure of the Euro Class. As a result the Euro Class shares will be redeemed on 1 October 2014 and the Euro
Class shares will be cancelled from the officiallist of the UK Listing Authority and the London Stock Exchange effective 2
October 2014. The Euro Class shareholders will receive the redemption proceeds in the week commencing 17 November 2014.
SCHEDULE OF INVESTMENTS
30 June 2014 SECURITIES PORTFOLIO
NOMINAL HOLDINGS
VALUATION SOURCE CURRENCY
VALUATION
GBP
TOTAL NET ASSETS %
AllBlueLimited Sterling
Shares 3,072,862 £626,521,903 £626,521,903
75.38%
AllBlue Leveraged Feeder
LimitedSterling Shares 488,780 £124,311,642 £124,311,642 14.96%
Institutional Sterling Government LiquidityFund -
Core (Acc) Shares 11,654 £1,175,482 £1,175,482
0.14%
AllBlue LimitedEuro Shares 73,517 E14,852,144 £11,890,275 1.43%
AllBlueLimited US Dollar
Shares 370,340 $75,324,691 £44,034,076
5.30%
£807,933,378 97.21%
31 December 2013 SECURITIES PORTFOLIO
NOMINAL HOLDINGS
VALUATION SOURCE CURRENCY
VALUATION
GBP
TOTAL NET ASSETS %
AllBlueLimited Sterling Shares 3,256,846 £637,112,281 £637,112,281 75.71%
AllBlue Leveraged Feeder
LimitedSterling Shares 512,852 123,359,329 £123,359,329 14.66%
Institutional Sterling Government LiquidityFund -
Core (Acc) Shares 11,654 1,174,486 £1,174,487
0.14%
AllBlue LimitedEuro Shares 79,426 E15,415,470 £12,802,484 1.52%
AllBlueLimited US Dollar
Shares 342,943 $67,032,383 £40,485,828
4.81%
£814,934,408 96.84%
SHAREHOLDER INFORMATION
The Company's Sterling Shares,Euro Shares and US Dollar Shares are capableof being traded on the London StockExchange's
main marketfor listed securities. All Shares may be dealt in directly through a stockbroker or professional adviser acting
on an investor'sbehalf. The buying and selling of Shares may be settledthrough CREST.
Approximately 20 business days after the end of each month the confirmed net asset value for each class of Share is
announced, together with information on the Company's investments and performance report, to a regulatory information
serviceprovider of the London Stock Exchange. In addition, on a weekly basis the Company announces in the same manner the
estimatednet asset valuefor each class of Share.
The ISIN, SEDOL and the London Stock Exchange mnemonic of each share class is:
ISIN SEDOL LSEmnemonic
Sterlingshareclass GB00B13YVW48 B13YVW4 BABS
Euroshareclass GB00B13YXC81 B13YXC8 BABE
USDollarshareclass GB00B13YXH37 B13YXH3 BABU
Conversion betweenShare Classes
The Company currently offers a monthly conversion between share classes. Conversion forms can be foundon the Company's
website at www.bluecrestallblue.com.
Shareholder Enquiries
The Company's CREST compliantregistrar is Anson Registrars Limited in Guernseywhich maintains the Company's registers of
shareholders. They may be contactedby email at registrars@anson-group.comor by telephone on (44) 01481711301.
Further information regarding the Company can be found on its website at
www.bluecrestallblue.com.
CONTACT INFORMATION AND ADVISORS
Directors
Richard Crowder
*Andrew Dodd Steven Le Page Paul Meader
John R Le Prevost
*Robert Heaselgrave as alternate director for Andrew Dodd
Registered Officeof the Company
JTC (Guernsey) Limited
PO Box 156, FrancesHouse Sir WilliamPlace
St Peter Port Guernsey GY1 4EU
Telephone +44 (0)1481 702400
Administrator and Company Secretary JTC (Guernsey) Limitedformerly JTC Fund Managers (Guernsey) Limited
PO Box 156, FrancesHouse Sir WilliamPlace
St Peter Port Guernsey GY1 4EU
Telephone +44 (0)1481 702400
Registrar, Paying Agent and Transfer Agent
Anson Registrars Limited
PO Box 426
Anson House, Havilland Street, St Peter Port,
Guernsey GY1 3WX
UK Transfer Agent
Anson Registrars (UK) Limited 3500 Parkway
Whiteley Hampshire
England PO15 7AL
Auditor
Ernst & Young LLP 14New Street
St Peter Port Guernsey GY1 4AF
Corporate Broker Jefferies Hoare Govett Vintners Place
68 Upper Thames Street London
England EC4V 3BJ
Corporate Broker Dexion Capital plc 1 Tudor Street London
England EC4Y 0AH
Advocates to the Company as to Guernsey Law
Mourant Ozannes POBox 186
1 Le Marchant Street StPeter Port Guernsey GY1 4HP
Solicitors to the Company as to English Law
Herbert Smith LLP Exchange House
Primrose Street London
England EC2A 2HS
Carey Olsen
P.O.
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