Allen Global Partners’ LP and Offshore Funds were down 0.78 percent and 0.81 percent in net returns for the second quarter of 2012, while the year to date returns are up 1.74 percent and 1.66 percent respectively. Both funds performed well in the last quarter and generated positive returns.
Allen Global funds performed well in Cove Energy PLC (LON:COV) , Culligan International Company, and Select Service Partner Ltd Group, a food services company in UK.
Cove Energy PLC (LON:COV) invited bids on its 8.5 perecnt stake in a natgas exploration project in Mozambique during Q2. The highest offer was £2.40 per share by Thailand’s PTT Exploration & Production. Royal Dutch Shell plc (NYSE:RDS.A) (NYSE:RDS.B) withdrew from its competing bid of £2.20 per share. There are speculations that Royal Dutch Shell plc (NYSE:RDS.A) (NYSE:RDS.B) is interested in buying Anadarko’s interest in Mozambique’s gas field. Anadarko Petroleum Corp. is another one of Allen Global investments.
Culligan International Company provides water filtration systems and has undergone recent debt restructuring which lead to an upward trend which proved beneficial for Allen Global. The fund profited from its stake in SSP Group owing to the increase in investments from lenders in return of improved cash payments. Contrarian Capital owns SSP Group debt as noted in an earlier article.
The fund was down in Macquarie Atlas Roads Limited (ASX:MQA), Ivanhoe Mines (Dan Loeb’s Third Point has a long position in the company), now trading as Turquoise Hill Resources Ltd (NYSE:TRQ), Anadarko Petroleum Corporation (NYSE:APC), and Comverse Technology, Inc. (NASDAQ:CMVT)
Macquarie Atlas Roads Limited (ASX:MQA) bought shares in a French toll road company, and this acquisition was affected during the second quarter which led to a decline in share price. The company is expected to pay dividends in future and to spin off some of its assets. Allen Global liquidated its interest in Ivanhoe Mines Ltd. and Comverse Technology, Inc. in the second quarter due to progressively unfavorable performance.
Anadarko Petroleum Corporation (NYSE:APC) had suffered in the previous months due to claims of frauds from competitors and a general slow down in oil prices. As mentioned above, Anadarko Petroleum Corporation (NYSE:APC) has a bigger share (36.5 percent) in the Mozambique oil field and a sell-off of some or all of its stake is expected in future.
The letter comments on the debt crisis and absence of stimulus from European central banks, it also emphasizes on the need for structural reforms rather than mere bailouts programs. The hedge fund notes that the private equity industry faces serious headwinds, even after three years into the recovery. Allen Global is focused on buying such stakes where the risks are minimal and the trade is driven by quality, investments, divestiture, and restructurings.