Alma UBS Multi Strategy Alternatives

Fund

While March was a positive month for broad developed market indices, performance belied some of the factor turmoil as market rotations continued from February. Crowded long names and momentum continued to be challenged as they had been in February, while value continued its rally. As the market positions itself for a broad reopening of the economy, the prospect of inflation remains in focus with inflation sensitive assets suffering and global rates rising.

Monthly Performance:
At the strategy level, negative performance was led by Equity Hedged, while Trading also detracted, but to a lesser extent. Relative Value strategies produced slightly positive returns.

YTD Performance:
YTD, negative performance has been driven by Equity Hedged, although these losses have been partially offset by gains from Trading and Relative Value strategies. At the manager level. the largest contributors to performance are a US-focused cap structure/vol arb manager and an Asia-focused event-driven manager, while the largest detractor is a healthcare sector-focused manager.

Performance Contributors:
MTD through March, the largest contributor to performance was a quantitative equity manager. As the market becomes less headline-focused and fundamentals have started to drive valuations once more, quantitative equity strategies have started to perform better.

Performance Detractors:
On the negative side, a healthcare sector-focused manager incurred losses from growth names, particularly in the small to mid-capitalisation biotechnology sector. Elsewhere a China-focused Equity Hedged manager was negatively impacted on both the long and short side of the portfolio, from the rotation away from higher valuation and liquidity growth stocks and into value names.

Current investment strategy
We maintain our conviction in the long term growth prospects of both China and the biotechnology sector and will be rebalancing to bring the positions back to size. We continue to be interested in the opportunity set in risk arbitrage where we see the volume of M&A deals being significantly higher than last year. We believe that the recent sell off in SPACs has provided a good entry point and we continue to look for interesting opportunities in this space. While the growth drawdown has been significant, we do expect it to retrace, thus we are cautious of crystalizing losses at this point.