REG-Weiss Korea Opportunity Fund: Half-Yearly Financial Report and Unaudited Financial Statements for the Period Ended 30 June 2025
23/09/2025 07:02
WEISS KOREA OPPORTUNITY FUND LTD.
LEI 213800GXKGJVWN3BF511
(Classified Regulated Information, under DTR 6 Annex 1 section 1.1)
HALF-YEARLY FINANCIAL REPORT AND UNAUDITED FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30 JUNE 2025
Weiss Korea Opportunity Fund Ltd. (the “Company”) has today released its
Half-yearly Financial Report for the period ended 30 June 2025. The Report
will shortly be available for inspection via the Company's website
www.weisskoreaopportunityfund.com.
Company Performance
As at As at
30 June 2025 31 December 2024
£ £
Total Net Assets 112,585,886 96,960,467
NAV per share 1.63 1.40
Mid-Market Share price 1.52 1.36
Since Managed Wind-Down WKOF Inception to Managed Wind-Down
NAV Return 20.3% 79.2%
Benchmark Return 27.3% 41.4%
As at A s at
30 June 2025 31 December 2024
Portfolio Discount* 22.7% 46.0%
Share Price Discount (6.8%) (3.2%)
Fund Dividend Yield 2.7% 3.8%
Average Trailing 12-Month P/E Ratio of Preference Shares Held 9.2x 6.0x
P/B Ratio of Preference Shares Held 0.3 0.3
Annualised Total Expense Ratio 2.5% 2.0%
*Since Managed Wind-Down
Performance since the start of Managed Wind-down on 15 April 2025 to 30 June
2025 is calculated on the basis of the Net Asset Value per Ordinary Share of
WKOF. The value of WKOF NAV per share performance since Managed Wind-down
represents a total return, inclusive of all dividends paid to WKOF
Shareholders since Managed Wind-down. The NAV per share may differ from the
price at which shares of WKOF may be purchased or sold on AIM. Performance of
NAV per share during any specific period may therefore not be reflective of
the returns an investor would receive by investing in shares of WKOF during
such period. For WKOF, this return includes all dividends paid to WKOF’s
Shareholders and assumes that these dividends were reinvested in WKOF’s
Shares at the next date for which WKOF reports a NAV, at the NAV for that
date.
*Portfolio Discount
The portfolio discount represents the discount of WKOF’s actual NAV to the
value of what the NAV would be if WKOF held the respective common shares of
issuers rather than preference shares on a one-to-one basis.
As at close of business on 22 September 2025, the latest published NAV per
Share was £1.62 and the Share Price was £1.50.
Chair’s Report
For the period ended 30 June 2025
Company Performance
During the period, the Company announced its intention to enter into Managed
Wind-down, which was approved by Shareholders on 14 April 2025. During the
period 1 January 2025 to the commencement of the Managed Wind-down (14 April
2025), WKOF’s NAV in pounds Sterling (“GBP”) decreased by -1.04%,
including reinvested dividends, compared to the reference MSCI South Korea
25/50 Net Total Return Index (the “Korea Index”), which appreciated by
0.2%. Performance since the Managed Wind-down is detailed in the Investment
Manager’s report.
Dividend
The Directors declared an interim dividend of 4.0788 pence per share in May
2025 to distribute the income received by WKOF in respect of the period ended
30 April 2025. This dividend was paid to all Shareholders on 23 June 2025.
Compulsory Redemption
On 25 June 2025, the Company announced its intention to return £70 million to
Shareholders by way of a compulsory redemption of Shares, in accordance with
the terms of the Managed Wind-down previously approved by Shareholders. The
redemption was executed following the close of business on 9 July 2025, with
42,931,567 Shares redeemed at a price of 163.05 pence per Share. Redemption
proceeds were paid on 23 July 2025. All redeemed Shares were cancelled, and
the remaining Shares were redesignated under the new ISIN: GG00BT26K977.
Future Redemptions
As separately announced today, the Company is pleased to confirm that it
intends to return £35 million to Shareholders by way of a second compulsory
redemption of shares. The second redemption is expected to be executed
following the close of business on 7 October 2025 with proceeds paid on or
around 21 October 2025. Further details of this redemption are set out in the
separate announcement.
Subject to market conditions and other factors, we currently anticipate the
liquidation of the Company and a final compulsory redemption to occur in the
months following completion of the second compulsory redemption. We are
mindful of managing the impact of costs on a diminishing portfolio of assets
and will seek to liquidate the Company in a cost-effective manner.
Shareholders will be closely informed of developments. It is also noted that
the Company will be required to de-list before liquidation can take place.
I look forward to communicating with you about WKOF’s further progress over
the coming months. If any Shareholders wish to speak with the Board, please
contact Singers, and we will be happy to answer any questions you may have.
Krishna Shanmuganathan
Chair
23 September 2025
Investment Manager’s Report
For the period ended 30 June 2025
Managed Wind-down of the Fund
As discussed in last year’s Annual Report, we notified WKOF’s Board of
Directors in November 2024 that we believed the opportunity set and strategy
for the fund continuing in its current form was less attractive than it had
been in the past, including at WKOF’s inception in 2013. Moreover, we did
not think this change in circumstances was likely to improve in the
foreseeable future. Our assessment was based on a number of factors:
* Several large and more liquid preference shares had their discounts narrowed
to the point where they were no longer attractive investments for the fund.
Consequently, the pool of more liquid preference shares available for
investment decreased.
* South Korea's continued efforts to open its financial markets to foreign
investors meant that the Company's holdings could now be replicated in more
cost-effective ways than through the Company itself.
* It was felt that given the above and the performance over the last two years
that more shareholders would be likely to consider taking up the realisation
opportunity which was due to take place this year. If this had happened, the
overhead cost per share to investors would increase, potentially to an
uneconomic and unacceptable level.
The Board subsequently commenced a strategic review to consider the future of
the Company and to explore the strategic options available, including a change
of investment mandate and/or a potential combination of the Company’s assets
with another suitable investment company or fund. The shortlisted proposals
were thoroughly assessed and meetings were held with interested parties.
However, due to the complexities associated with the shortlisted proposals
that came to light in the detailed discussions, combined with differing views
of Shareholders, the Board reached the decision that a Managed Wind-down was
the fairest proposal and would be in the best interests of the Company and its
Shareholders as a whole.
Shareholders approved the Managed Wind-down at an Extraordinary General
Meeting on 14 April 2025, and the Company formally began the wind-down
process. We are pleased to report the Company made a distribution of GBP 70.0
million via compulsory redemption on 9 July (paid on 23 July) with minimal
market impact.
WKOF Performance Attribution
Prior to the Managed Wind-down, WKOF’s returns (on a currency-neutral basis)
were driven by five primary factors:
* The performance of the Korean equity market generally as indicated by the
Korea Index;
* The discounts of the preference shares WKOF holds narrowing or widening
relative to their corresponding common shares;
* The performance of the common shares (which correspond to the preference
shares held by WKOF) relative to the performance of the Korean equity market;
* Excess dividend yields of the preference shares held by WKOF; and
* Fees, expenses and other factors.
In order to compare WKOF’s relative return to the Korea Index, we report the
attribution of these aforementioned factors to Company’s performance from
inception until the date of the Managed Wind-down (14 April 2025). Since the
Managed Wind-down, WKOF’s returns have additionally been driven by the
presence of cash-equivalent instruments in the portfolio, which have been
accumulated to fund distributions.
Performance Attribution Table
Return Component Inception to Managed Wind-down Since Managed Wind-down
The Korea Index 57.9% 27.3%
Discount Narrowing (Widening) Of Preferred Shared Owned 72.4% N/A
WKOF common Shares vs. The Korea Index -24.6% N/A
Excess Dividend Yield of Preferred Shares Owned 14.5% N/A
Fees, Expenses and Others -40.8% N/A
NAV Performance 79.2% 20.3%
Since the Managed Wind-down, WKOF increased its holdings of cash and cash
equivalents and decreased its holdings of Korean preference shares. Given the
recent market rally in Korea’s equity markets, WKOF’s NAV performance has
lagged The Korea Index.
WKOF Inception to Managed Wind-down performance is calculated from 14 May 2013
through 14 April 2025, and on the basis of the Initial Net Asset Value per
Ordinary Share of WKOF.
Performance since the start of Managed Wind-down on 15 April 2025 until the
last day of the relevant month. Performance for other periods, while available
upon request, is not considered relevant in light WKOF’s current investment
objective.
Hedging
Prior to the Managed Wind-down performance, WKOF pursued its investment
strategy with a portfolio that was generally long-only. However, as further
described in earlier Annual reports, the Board approved a hedging strategy
intended to reduce exposure to extreme events that, earlier, would have been
catastrophic to its Shareholders' Investments in WKOF because of political
tensions in Northeast Asia.
WKOF limited its use of hedging instruments to the purchase of credit default
swaps (“CDS”) and put options on the MSCI Korea 25/50 Index. As noted in
the 2024 Annual Report, we expected WKOF’s exposure to CDS to gradually
decrease during the Managed Wind-down process. As of 30 June 2025, WKOF has no
exposure to CDS.
Concluding Remarks
Thank you to our long-term shareholders. We are proud of WKOF’s performance
during the 12 years the Company has been listed on AIM, during which we have
continually sought to do what is in the best interests of shareholders. We
continue to believe the Managed Wind-down is in the best interest of our
shareholders.
Weiss Asset Management LP
23 September 2025
Statement of Financial Position
As at 30 June 2025
As at As at
30 June 31 December
2025 2024
(Unaudited) (Audited)
£ £
Assets
Financial assets at fair value through profit or loss 97,855,874 94,780,296
Other receivables 3,377,866 913,777
Margin account 587,037 1,041,581
Cash and cash equivalents 13,005,240 1,224,127
Total assets 114,826,017 97,959,781
Liabilities
Derivative financial liabilities - 283,591
Other payables 2,240,131 715,723
Total liabilities 2,240,131 999,314
Net assets 112,585,886 96,960,467
Represented by:
Shareholders' equity and reserves
Share capital 33,912,856 33,912,856
Other reserves 78,673,030 63,047,611
Total Shareholders' equity 112,585,886 96,960,467
Net Assets Value per Ordinary Share 1.6254 1.3998
The Financial Statements were approved and authorised for issue by the Board
of Directors on 23 September 2025.
Krishna Shanmuganathan Gill Morris
Chair Director
Statement of Comprehensive Income
For the period ended 30 June 2025
For the period ended For the period ended
30 June 2025 30 June 2024
(Unaudited) (Unaudited)
£ £
Income
Net gain on financial assets at fair value through profit or loss 18,501,449 8,955,523
Net gain on derivative financial instruments at fair value through profit or loss 283,591 334,628
Net foreign currency losses (78,141) (317,329)
Dividend income 1,984,071 2,945,724
Bank interest income 8,655 2,788
Total income 20,699,625 11,921,334
Expenses
Operating expenses (1,812,512) (1,915,084)
Total operating expenses (1,812,512) (1,915,084)
Profit for the period before dividend withholding tax 18,887,113 10,006,250
Dividend withholding tax (436,489) (647,437)
Profit for the period after dividend withholding tax 18,450,624 9,358,813
Profit and total comprehensive income for the period 18,450,624 9,358,813
Basic and diluted earnings per Share 0.2664 0.1351
All items derive from continuing activities.
Following review of the AIC SORP and its impact on the Statement of
Comprehensive Income, the Board has decided not to follow the recommended
income and capital split. This is due to the fact that the Company’s
dividend policy is not influenced by its expense policy.
Statement of Changes in Equity
For the period ended 30 June 2025
Share Other
capital reserves Total
For the period ended 30 June 2025 (Unaudited) £ £ £
Balance as at 1 January 2025 33,912,856 63,047,611 96,960,467
Total comprehensive income for the period - 18,450,624 18,450,624
Transactions with Shareholders, recorded directly in equity
Distributions paid - (2,825,205) (2,825,205)
Balance as at 30 June 2025 33,912,856 78,673,030 112,585,886
Share Other
capital reserves Total
For the period ended 30 June 2024 (Unaudited) £ £ £
Balance as at 1 January 2024 33,912,856 82,936,848 116,849,704
Total comprehensive income for the period - 9,358,813 9,358,813
Transactions with Shareholders, recorded directly in equity
Distributions paid - (3,591,484) (3,591,484)
Balance as at 30 June 2024 33,912,856 88,704,177 122,617,033
Statement of Cash Flows
For the period ended 30 June 2025
For the period ended 30 June 2025 For the period ended 30 June 2024
(Unaudited) (Unaudited)
£ £
Cash flows from operating activities
Profit and total comprehensive income for the period 18,450,624 9,358,813
Adjustments for:
Interest income (8,655) -
Net gains on financial assets at fair value through profit or loss (18,501,449) (8,955,523)
Exchange losses on cash and cash equivalents 235,138 557,166
Net gains on derivative financial instruments at fair value through profit or loss (283,591) (334,628)
Increase in receivables excluding dividends (1,539,090) (13,594)
(Decrease)/increase in other payables excluding withholding tax (109,933) 172,882
Dividend income net of withholding taxes (1,547,582) (2,298,287)
Dividend received net of withholding taxes 2,256,924 3,358,429
Bank interest received 8,655 -
Purchase of financial assets at fair value through profit or loss (76,471,607) (39,218,509)
Proceeds from the sale of financial assets at fair value through profit or loss 91,897,478 40,041,173
Net cash generated from operating activities 14,386,912 2,667,922
Cash flows from investing activities
Opening of derivative financial instruments - 87
Closure of derivative financial instruments - (141)
Decrease/(increase) in margin account 454,544 (27,001)
Net cash generated from/ (used in) from investing activities 454,544 (27,055)
Cash flows from financing activities
Distributions paid (2,825,205) (3,591,484)
Net cash used in financing activities (2,825,205) (3,591,484)
Net increase/(decrease) in cash and cash equivalents 12,016,251 (950,617)
Exchange losses on cash and cash equivalents (235,138) (557,166)
Cash and cash equivalents at the beginning of the period 1,224,127 3,364,287
Cash and cash equivalents at the end of the period 13,005,240 1,856,504
For further information, please contact:
Singer Capital Markets Limited James Maxwell/ James Fischer – Nominated Adviser James Waterlow – Sales +44 20 7496 3000
Northern Trust International Fund Administration Services (Guernsey) Limited Company Secretary +44 1481 745001
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