HEPTAGON FUND PLC
(an open-ended variable capital investment company incorporated with limited liability in
Ireland with registration number 449786)
YACKTMAN US EQUITY FUND
HELICON FUND
OPPENHEIMER DEVELOPING MARKETS
EQUITY FUND
KOPERNIK GLOBAL ALL-CAP EQUITY FUND
OPPENHEIMER GLOBAL FOCUS
EQUITY FUND
SEMI-ANNUAL REPORT
AND
UNAUDITED FINANCIAL STATEMENTS
FOR THE HALF YEAR ENDED 31 MARCH 2014
HEPTAGON FUND PLC
SEMI-ANNUAL REPORT AND UNAUDITED FINANCIAL STATEMENTS
For the half year ended 31 March 2014
TABLE OF CONTENTS
Page
Company Information
2
General Information
3
Investment Manager’s Report
5
Investment Portfolio Statement
17
Statement of Financial Position
28
Statement of Comprehensive Income
34
Statement of Changes in Net Assets attributable to Holders of Redeemable
Participating Shares
37
Statement of Cash Flows
39
Notes to the Financial Statements
42
Significant Portfolio Movements
59
Appendix 1 – Total Expense Ratios
69
Appendix 2 – Portfolio Turnover Rates
70
1
HEPTAGON FUND PLC
SEMI-ANNUAL REPORT AND UNAUDITED FINANCIAL STATEMENTS
For the half year ended 31 March 2014
COMPANY INFORMATION
Directors of the Company
Fionán Breathnach (Irish)*
Michael Boyce (Irish)**
Robert Rosenberg (American)
Administrator
Brown Brothers Harriman
Fund Administration Services (Ireland) Limited
Styne House
Upper Hatch Street
Dublin 2
Ireland
Legal Advisors
Mason Hayes & Curran
South Bank House - 6th Floor
Barrow Street
Dublin 4
Ireland
Promoter, Distributor and Investment Manager
Heptagon Capital Limited
171, Old Bakery Street
Valetta
Malta
VLT1455
Independent Auditor
Grant Thornton
24-26 City Quay
Dublin 2
Ireland
Custodian
Brown Brothers Harriman
Trustee Services (Ireland) Limited
Styne House
Upper Hatch Street
Dublin 2
Ireland
Sub-Investment Managers
OFI Global Institutional Inc.
Two World Financial Center
225 Liberty Street
11th Floor
New York
NY 10281-1008
USA
Yacktman Asset Management LP
6300 Bridgepoint Parkway
Building One
Suite 500
Austin 78730
Texas
USA
Heptagon Capital LLP
63 Brook Street
Mayfair
London
W1K 4HS
United Kingdom
Kopernik Global Investors LLC
Two Harbour Place
302 Knights Run Avenue
Suite 1225
Tampa 33602
Florida
USA
Secretary and Registered Office
MHC Corporate Services Limited
South Bank House - 6th Floor
Barrow Street
Dublin 4
Ireland
* Non-executive
** Independent & non-executive
2
HEPTAGON FUND PLC
SEMI-ANNUAL REPORT AND UNAUDITED FINANCIAL STATEMENTS
For the half year ended 31 March 2014
GENERAL INFORMATION
Heptagon Fund plc (the “Company”) was incorporated on 27 November 2007 as an open-ended umbrella type
investment company with variable capital in Ireland.
The Company was originally authorised in Ireland by the Central Bank of Ireland, as an investment company
pursuant to part XIII of the Companies Act 1990 on 19 December 2007, to market solely to “Professional
Investors”. The Directors of the Company subsequently applied for revocation of this authorisation to coincide with
the authorisation of the Company as an Undertaking for Collective Investment in Transferable Securities (“UCITS”)
and from 11 November 2010, the Company is authorised and regulated in Ireland by the Central Bank of Ireland as a
UCITS pursuant to the European Union (Undertakings for Collective Investment in Transferable Securities)
Regulations 2011 (the “UCITS Regulations”).
The Company is structured in the form of an umbrella fund consisting of different sub-funds comprising one or
more classes. The shares of each class rank pari passu with each other in all respects provided that they may differ as
to certain matters including currency denomination, hedging strategies, if any, applied to the currency of a particular
class, dividend policy, the level of fees and expenses to be charged, subscription or redemption procedures or the
minimum subscription and minimum holding applicable. The shares of each class established in a sub-fund will be
specified in the relevant supplement.
The Company has segregated liability between sub-funds (the “Sub-Funds”) which are set out below:
-
Yacktman US Equity Fund (“Yacktman”)
Helicon Fund (“Helicon”)
Oppenheimer Developing Markets Equity Fund (“Oppenheimer”)
Kopernik Global All-Cap Equity Fund (“Kopernik”)
Oppenheimer Global Focus Equity Fund (“Oppenheimer Global”)
The assets of a Sub-Fund are invested separately in accordance with the investment objectives and policies of that
Sub-Fund.
The base currency for Yacktman, Helicon, Oppenheimer, Kopernik and Oppenheimer Global is US Dollars
(“US$”). The reporting currency for these Financial Statements is the US$.
Pricing
There is a single price for buying, selling and switching shares for each Sub-Fund. This is represented by the Net
Asset Value. The Directors may deduct a fair sum in respect of repurchase requests which necessitate any Sub-Fund
breaking deposits at a penalty or realising investments at a discount in order to realise assets to provide monies to
meet such a repurchase.
Minimum investment
The minimum subscription for Yacktman, Oppenheimer, Kopernik and Oppenheimer Global for the following
Classes in each Sub-Fund is as follows: Class A US $15,000, Class B US $15,000, Class C US $1,000,000, Class I
US $2,000,000, Class A1 US $15,000, Class AD US $15,000, Class AD1 US $15,000, Class AE EUR €15,000,
Class AE1 EUR €15,000, Class AG GBP £15,000, Class AG1 GBP £15,000, Class AGD GBP £15,000, Class
AGD1 GBP £15,000, Class B1 US $15,000, Class CD US $1,000,000, Class CE EUR €1,000,000, Class CG GBP
£1,000,000, Class CGD GBP £1,000,000, Class I1 US $2,000,000, Class ID US $2,000,000, Class ID1 US
$2,000,000, Class IE EUR €2,000,000, Class IE1 EUR €2,000,000, Class IG GBP £2,000,000, Class IG1 GBP
£2,000,000, Class IGD GBP £2,000,000 and Class IGD1 GBP £2,000,000. The minimum subscription for
Oppenheimer, Kopernik and Oppenheimer Global for the following Classes is as follows: Class S US $20,000,000,
Class SD US $20,000,000, Class SE EUR €20,000,000, Class SED EUR €20,000,000, Class SGB GBP £20,000,000
and Class SGBD GBP £20,000,000. The minimum subscription for Oppenheimer for Class IF US is $2,000,000.
3
HEPTAGON FUND PLC
SEMI-ANNUAL REPORT AND UNAUDITED FINANCIAL STATEMENTS
For the half year ended 31 March 2014
GENERAL INFORMATION (CONTINUED)
Minimum investment (continued)
The minimum subscription for Helicon for the following Classes is as follows: Class R US $100,000, Class I US
$1,000,000, Class S US $100,000, Class D None, Class RHC US $100,000, Class IHC US $1,000,000, Class B US
$100,000, Class ID US $1,000,000, Class IE EUR €1,000,000, Class IG GBP £1,000,000, Class IGD GBP
£1,000,000, Class RD US $100,000, Class RE EUR €100,000, Class RG GBP £100,000, Class RGD GBP £100,000,
Class SD US $100,000, Class SE EUR €100,000, Class SG GBP £100,000 and Class SGD GBP £100,000.
Dividend policy
The income and earnings and gains of classes which are accumulating classes will be accumulated and reinvested on
behalf of the shareholders. It is not currently intended to distribute dividends to shareholders in these classes.
Where profits are available, it is the Directors’ current intention to declare and distribute to shareholders the income
and earnings and gains of classes which are distributing classes.
Dealing day
The dealing day for Yacktman, Helicon, Oppenheimer, Kopernik and Oppenheimer Global is every business day or
such other day or days as may be determined by the Directors and notified to shareholders in advance, provided
there shall be at least one dealing day per fortnight.
Shares in issue
Shares will be issued to investors as shares of a class in these Sub-Funds. The Directors may, whether on the
establishment of these Sub-Funds or from time to time, with prior notification to and clearance, by the Central Bank
of Ireland, create more than one class of shares in these Sub-Funds. The Directors may in their absolute discretion
differentiate between classes of shares, without limitation, as to currency denomination of a particular class,
dividend policy, hedging strategies, if any, applied to the designated currency of a particular class, fees and
expenses, subscription or redemption procedures or the minimum subscription or minimum holding applicable.
Significant events during the period
A new Prospectus for the Company was issued on 29 November 2013 and was approved by the Central Bank of
Ireland.
The Company launched two new Sub-Funds, Kopernik Global All-Cap Equity Fund and Oppenheimer Global Focus
Equity Fund, on 10 December 2013.
4
HEPTAGON FUND PLC
SEMI-ANNUAL REPORT AND UNAUDITED FINANCIAL STATEMENTS
For the half year ended 31 March 2014
INVESTMENT MANAGER’S REPORT
FOR THE HALF YEAR ENDED 31 MARCH 2014
Yacktman
During the first quarter of 2014 the Heptagon Yacktman US Equity fund* (the “Fund”) produced returns of 0.5%,
compared to the S&P 500 Net Index, which was up 1.7%. For the 12 months ending 31 March 2014, the Fund
returned 13.5%, while the benchmark returned 21.1%. Yacktman has a significant allocation to high quality
companies, selling at what it believes are attractive prices.
TOTAL RETURNS
As of 31 March 2014
ANNUALIZED
1-Year
3-Year
13.5%
11.7%
21.1%
13.9%
15.0%
13.3%
21.9%
14.7%
Yacktman US Equity Fund (UCITS)
S&P 500© Net TR
The Yacktman Fund (YACKX)
S&P 500© Index
Yacktman US Equity Fund (UCITS)
S&P 500© Net TR
The Yacktman Fund (YACKX)
S&P 500© Index
1-Year
13.5%
21.1%
15.0%
21.9%
5-Year
24.5%
21.2%
CUMULATIVE
3-Year
5-Year
39.4%
47.8%
45.5%
199.5%
50.7%
161.1%
10-Year
10.3%
7.4%
10-Year
166.2%
104.5%
* Class I Shares
Portfolio Review
Volatility increased during the quarter which allowed the investment team at Yacktman to make net purchases and
reduce the cash levels in the Fund. The team feels well positioned with significant weightings in high-quality
businesses that they think can demonstrate strong operating results over the next few years.
Many of the Fund’s top holdings are in globally dominant firms with consistent business models. The consistency
element is especially important in this investing climate, as the stock market has rallied for more than five years and
Yacktman believes that corporate profit margins are at unsustainably high levels.
The Fund is a diversified fund such that individual positions representing 5% or more of assets may not exceed 40%
of the Portfolio’s value. At 31 March 2014, these larger positions totalled approximately 26% of the Fund’s assets.
Given the diversified nature of the investment mandate, the Fund also has many positions that are less than 1% of
assets. Yacktman believes these holdings can attractively compound over time while giving the portfolio the desired
level of diversification.
Yacktman’s goal is to provide solid returns over time while seeking to manage the level of risk in the Portfolio.
Yacktman’s emphasis on portfolio risk enabled the team to protect the Portfolio during the two significant market
declines of the past 15 years. The recent increase in market volatility is a reminder that how you generate returns
over time matters greatly.
5
HEPTAGON FUND PLC
SEMI-ANNUAL REPORT AND UNAUDITED FINANCIAL STATEMENTS
For the half year ended 31 March 2014
INVESTMENT MANAGER’S REPORT (CONTINUED)
FOR THE HALF YEAR ENDED 31 MARCH 2014
Yacktman (continued)
Top Contributors
Contributors to performance for the quarter included Microsoft Corp, CR Bard Inc, Stryker Corp and Oracle Corp.
During the quarter, Microsoft Corp appointed Satya Nadella as the new Chief Executive Officer. Most recently,
Nadella was President of Server and Tools at Microsoft Corp, one of the most successful and well-run divisions
within the company. Yacktman looks for the company to have a disciplined and focused strategy under the new
CEO.
Healthcare shares continued to shine during the quarter, with both CR Bard Inc and Stryker Corp rising solidly.
Yacktman trimmed back its position in CR Bard Inc due to the strong performance but still like the company for the
long term. Over the next few years, CR Bard Inc is positioned to grow earnings rapidly as new products receive
approval and due to increased distribution.
Oracle Corp’s shares rallied during the quarter, positively impacting the Fund. The Oracle Corp position was
established less than a year ago and is an example of how Yacktman patiently wait for opportunities. Yacktman
purchased the shares after studying the company for a long time, establishing the position after short-term business
weakness caused a sharp sell-off in the shares.
Top Detractors
Detractors in the quarter included Twenty-First Century Fox Inc, Class A (Fox), Coca-Cola Co and Avon Products
Inc.
Fox’s shares declined after the company announced it would be delisting from the Australian stock exchange. A bit
of history: Rupert Murdoch built the Fox business empire from The News, an Australian newspaper he inherited
from his father in 1952. In 2004, News Corporation (from which Fox’s shares were spun-off last year) re-domiciled
in the United States. Maintaining the listing in Australia was both a regulatory burden and an unnecessary expense,
and both factors likely influenced the delisting decision.
Roughly 10% of Fox’s outstanding shares were owned by Australian investors at year-end, with the majority of this
ownership consisting of voting shares. Before the delisting announcement, the Fund’s position had consisted of nonvoting shares because until recently, these shares sold at a discount and offered greater liquidity. In this
circumstance, Yacktman valued the price discount more highly than the voting rights, as the large voting position
represented by Rupert Murdoch and his family gave them a great deal of control. In the first quarter, the selling
pressure caused by the delisting took the voting shares to a discount, so Yacktman sold a portion of its high-cost,
non-voting shares to move to the voting shares.
Yacktman believes both classes of stock have the potential to perform better when the selling pressure caused by the
delisting is over. Recently Fox has been investing significantly in its businesses, creating both a national sports
network (FS One) and a new entertainment channel (FXX), along with acquiring sports rights globally. These
investments have reduced near-term earnings, but have set up the company for extremely fast growth over the next
several years.
Coca-Cola Co shares fell after announcing weak earnings due to soft sales of carbonated beverages and significant
currency weakness in emerging economies like Russia and Brazil. Over time, Yacktman believes Coca-Cola Co has
the ability to steadily grow its sales and earnings and remain as an incredibly dominant force in the global beverage
business. With just 3% of global beverage sales, Yacktman thinks Coca-Cola Co has the ability to produce attractive
growth for decades to come.
6
HEPTAGON FUND PLC
SEMI-ANNUAL REPORT AND UNAUDITED FINANCIAL STATEMENTS
For the half year ended 31 March 2014
INVESTMENT MANAGER’S REPORT (CONTINUED)
FOR THE HALF YEAR ENDED 31 MARCH 2014
Yacktman (continued)
Top Detractors (continued)
Avon Products Inc continued to be in turnaround mode and was pressured by weak emerging market economies as
well. Several years before Yacktman owned shares, Avon Products Inc was one of the highest multiple consumer
staples companies due to its emerging markets exposure. Today it is one of the lowest multiple, consumer staples
companies, in part because now the market has instead got investor concerns about emerging markets exposure.
Yacktman is happy to take advantage of this shift in investor sentiment.
Portfolio Changes
Blackberry Ltd and News Corp were eliminated from the Fund. Yacktman reduced positions in special situations
like Apollo Education Group Inc, Class A and Corning Inc in the Fund due to price appreciation.
Conclusion
Yacktman thinks the Fund is extremely well positioned today. During the first quarter it found additional attractive
investment opportunities, allowing the team to reduce cash levels. Yacktman will continue to work hard to evaluate
current positions and look for new opportunities, and as always, will be diligent, objective and patient when
managing your Yacktman US Equity Fund.
Helicon
The Helicon Fund is outperforming on both a year-to-date and inception-to-date basis.
Through to 31 March, Helicon has gained 1.2% so far in 2014, 70 basis points ahead of its benchmark (a 50:50
blend of the MSCI All Country World Index and 3M US$ LIBOR). This performance also puts Helicon ahead of the
broader equity market (the ACWI is up 0.9%), despite Helicon having averaged just 60% net equity exposure YTD,
as well as ahead of its peer group of UCITS equity hedge funds (the HFRUEH, up less than 1.0%). Since inception
close to three years ago, Helicon has now gained 17.9%, 200 basis points ahead of its benchmark and over 700 basis
points ahead of its peer group. In March, Helicon lost 0.4%. March’s factsheet is attached.
How we are invested
We ended February with net equity exposure of circa 55%, a decrease of 10 percentage points relative to how we
had begun the month. The decline in our net was driven by our growing concerns about the macro environment
(detailed below) and the consequent decision to adopt more prudent positioning. Our quantitative framework
continues to show positive developments in liquidity indicators, but is more neutral on valuation and risk factors. In
order to reduce our net, we sold both equities and futures. Correspondingly, our current portfolio is constructed of
just under 90% long exposure to equities (the remainder of the Fund is in short-term US$ T-Bills) offset by a circa
35% short book comprising futures diversified across the Euro Stoxx, S&P and FTSE on a broad pro-rata basis
relative to the long book. We have no major currency exposure at present, with the majority of our investments
hedged back to the US Dollar, our base currency.
7
HEPTAGON FUND PLC
SEMI-ANNUAL REPORT AND UNAUDITED FINANCIAL STATEMENTS
For the half year ended 31 March 2014
INVESTMENT MANAGER’S REPORT (CONTINUED)
FOR THE HALF YEAR ENDED 31 MARCH 2014
Helicon (continued)
Macro Views
April’s View From The Top (below) highlights that our reasoned assessment of the current landscape leads us to the
conclusion that there is a lack of visible and positive catalysts for risky assets (equities). A deteriorating outlook in
China and directionally tighter monetary policy in the US top our list of concerns. With regard to equities in
particular, we note that some markets (particularly the US) look overvalued to us, while all regions (excluding
Japan) are suffering negative earnings revisions. These stand at a one year low. Against this background, we believe
it is prudent to reduce equity exposure somewhat. Having some allocation towards cash also leaves us wellpositioned to move actively in the event of a major market drawdown and investors should remember that only one
5%+ equity market drawdown has indeed occurred in the last two years.
Equity Allocation
We only made one new addition to the portfolio (discussed below) in March. As part of our process of reducing our
net equity exposure during the month, we sold down in several holdings that screened least compellingly for us on
our internal valuation and qualitative framework. Nonetheless, the overall tilt of the portfolio remains broadly
unchanged: there is a clear bias towards mid-cap businesses; Europe and Japan are favored relative to the US (and
we continue not to have any direct EM exposure); and, our preferred sectors remain pro-cyclical, primarily
industrials, IT and consumer discretionary. By listing, Europe and Japan comprise 45%+ of the fund’s equity book
currently; by sector, the three above-mentioned equate to 70%+ of the fund’s equity book. As the attached factsheet
shows, Helicon continues to exhibit high tracking error against its equity benchmark.
Stock in the spotlight – Jungheinrich AG
The US$2.6bn German listed forklift manufacturer and logistics business became our newest investment in the Fund
last month. We first started following this business in our thematic (Helicon Thoughts) research and Jungheinrich
AG is exposed both to the trend of automation/ robotics and to that of expanding online retail. With 90% of its
revenues from within Europe, the business is also clearly exposed to upside from any macro recovery across the
continent. We derived further reassurance from dialogue with Jungheinrich AG and several peer businesses over the
last month. The stock has moved c4% since we initiated a position and is up circa16% YTD, but continues to trade
on a 10%+ FCF yield with significant valuation upside in our view.
Heptagon’s View From The Top
View from the very top: our reasoned assessment of the current landscape leads us to conclude that there is a lack of
visible and positive catalysts for risky assets. A deteriorating outlook in China and directionally tighter monetary
policy in the US top our list of concerns. For equities, an absence of earnings growth is also worrying. As a result,
we have chosen to be prudent and reduce directional equity exposure, reallocating towards lower-beta strategies and
cash. This approach leaves us well-positioned in the event of any major drawdown.
Asset Allocation
• Equities: Some markets (particularly the US) look overvalued to us, while all regions (excluding Japan) are
currently suffering negative earnings revisions. These stand at a one-year low. While emerging markets have
recently outperformed on a relative basis, they continue to face challenges and may only be appropriate for the
longer-term investor. We believe it is hence appropriate to reduce exposure to this asset class and our preferred
allocations within equities remain towards alpha-focused global equity managers focused on bottom-up
stockpicking.
8
HEPTAGON FUND PLC
SEMI-ANNUAL REPORT AND UNAUDITED FINANCIAL STATEMENTS
For the half year ended 31 March 2014
INVESTMENT MANAGER’S REPORT (CONTINUED)
FOR THE HALF YEAR ENDED 31 MARCH 2014
Asset Allocation (continued)
• Credit: The absence of inflation and still lackluster GDP growth help explain why the yield on the US 10-year has
fallen from 3.00% to 2.75% so far in 2014. Credit still offers some (albeit limited) carry in an uncertain world, a
relative safe haven amidst potentially growing geopolitical instability. Our approach is focused on managers with
high-conviction and differentiated approaches, particularly those with flexible mandates.
• Alternative Asset Managers: One of the few areas that have delivered clear outperformance so far in 2014 has
been event-driven managers. We have recently increased allocations in this area. Such managers offer relatively low
correlations relative to the equity markets and are benefiting from an environment that has seen over US$780bn of
deals announced so far in 2014 (growth of 35% year-on-year). Further activity seems likely.
The 2014 was always going to be a harder year for investors after the rally enjoyed over the previous twelve months.
Equity markets have generally lacked direction year-to-date, while credit has outperformed. These trends may
endure for some time further and it should remain a sobering reminder that equities have only experienced one
monthly drawdown of more than 5% in the last two years. The risk of another such event in the coming months
cannot at all be ruled out and several factors perturb us. We have concerns over valuation levels in some equity
markets (particularly the US, which has outperformed year-to-date), accompanied by an increasingly uncertain
global macro environment – compounded by investor complacency. As a consequence, a reduction in exposure to
more risky assets seems a logical strategy.
Two issues – a possible Chinese credit crunch and directionally tighter US monetary policy – concern us in
particular. Without wishing to state the obvious, these factors matter for investors not just in their own right, but
given the implications that the outcomes of these two events can have in other areas too. In other words, global
interconnectedness is a fact: either a crisis in China (which most still seem to dismiss as a possibility) or a
fasterthan-anticipated rise in US rates would likely intensify the current challenges facing many emerging
economies, while any developing market deterioration would have notably negative ramifications for the world’s
more advanced economies too.
To start with China, we believe that the economy may be fast appointing a tipping point in terms of a credit crunch.
Put simply, excess investment has helped drive recent economic growth; this growth is now slowing, just as the
costs of funding it – through debt – are rising. The figures speak for themselves: total (public and private) debt will
exceed 200% of GDP this year, according to Morgan Stanley, while the rate at which private sector debt has
increased in the last five years has only been surpassed by two other countries over any similar given time period in
recent history. The two were Spain and Ireland, and the salutary lessons from these geographies ought to be clear.
Meanwhile, Chinese industrial production stands at its lowest since July 2011, export growth is slowing (down 18%
year-on-year in March) and domestic retail sales are also weak.
Against this background, a series of selected corporate defaults has occurred, bank lending rates have risen and the
local currency has fallen. None of this ought not to be surprising. However, we continue to be taken aback by the
prevailing view of confidence in the seeming ability of the Chinese authorities to manage a situation that has all the
hallmarks of a potential credit crisis. A few select interventions and bail-outs may only be delaying the inevitable
and history clearly slows that such events are, by their very nature, unpredictable. Even if there is no full-blown
crisis, a hypothetical scenario of Chinese GDP slowing from a consensus 7.5% rate of growth in 2014 to a – perhaps
more realistic 4.0-5.0% outcome – is something that is both not discounted and would have major implications for
global investors.
Our second observation that should concern investors relates to the likely evolution of US monetary policy and the
considerable ambiguity that FOMC Chair Yellen seems to have introduced. Ben Bernanke admittedly let the rate
tightening genie out of the bottle last May when the word tapering was used for the first time, but the clear
implication from the Fed’s last statement – and contrary to most expectations – was that rates could start rising
within twelve months. Investors should also take note of comments from Charles Plosser, a voting member on the
FOMC: although a noted hawk, his suggestion was that Fed Fund rates could be at 4.0% by 2016. The market is
currently pricing just 2.5%.
9
HEPTAGON FUND PLC
SEMI-ANNUAL REPORT AND UNAUDITED FINANCIAL STATEMENTS
For the half year ended 31 March 2014
INVESTMENT MANAGER’S REPORT (CONTINUED)
FOR THE HALF YEAR ENDED 31 MARCH 2014
Asset Allocation (continued)
At the very least, the direction of travel for US rates seems to be upwards. This seems highly incongruous to us,
particularly in the context of both an absence of inflation and a current weakening in macro data. The core
consumption deflator (the Fed’s favored measure for inflation) dropped last month from 1.2% to 1.1%, its lowest
since March 2011, and there appear to be limited signs of near-term upward pressure on wage inflation, while both
China and Japan are currently exporting deflation by proxy, given their weakening currencies.
In addition, the housing market in the US (in particular) is exhibiting a number of potentially worrying signs.
Although housing starts remain some 50% below their pre-crisis highs, it is somewhat unclear whether such levels
may be achieved during this cycle. The 30-year US mortgage rate has already risen by around 150 basis points from
trough to its current level of 4.34%, and the implication from the Fed’s commentary is that they could ascend
further. However, sales of new US homes are presently at a five-month low, pending home sales have fallen 10.2%
year-on-year (with the rate of decline accelerating) and the failure of the NAHB builder confidence survey to
rebound in March (after its biggest ever drop in February) suggests that the weather alone cannot be blamed for
deteriorating sentiment. Consumer confidence indicators are also turning downwards at present.
An alternative interpretation of the reasons behind the shift in Fed stance could simply be that their relative caution
constitutes a form of ‘insurance’, a policy back-stop, should some of the more exuberant trends in the US become
increasingly pronounced and therefore need to be controlled. Although the Fed’s mandate relates to the real
economy rather than the equity market, it is in this latter area that there is perhaps more evidence of current excess.
We have observed in previous notes that US equities look overvalued on almost all fundamental and long-term
valuation metrics and, moreover, this valuation premium is currently being exacerbated by an absence of positive
earnings revisions (Morgan Stanley’s estimate for S&P EPS growth in 2014 has fallen, from 10.5% at the start of the
year to 9.0% currently). Meanwhile, IPO activity is at its most pronounced since the tech-bubble, with the number of
businesses that are loss-making at float coming close to previous record levels.
The implications of the above are twofold. First, a slowing rate of growth in China combined with potentially tighter
(at least perceived, even if not actual) US monetary policy will likely exacerbate current emerging market
challenges. Combined current account and budget deficits are creating economic pressures in a number of diverse
geographies. Second (and related), higher rates will probably serve to intensify the pace of broad fund flows away
from emerging markets into developed markets, particularly the US. This helps partly explain the resilience of US
equities (even if we are in a bubble, it may not immediately burst) and also only makes the circle more vicious for
certain developing markets.
Clearly if there is any form of emerging market shock or dislocation (whether this is inspired by China, a country
specific current account/ budget deficit event, or a geopolitical crisis), then the ramifications for developed markets
would undoubtedly be significant. The impact could be more pronounced than in previous crises (particularly 1997,
as the most obvious comparison) for several reasons: in particular, China’s role in the world economy is now much
more significant; and, developed economies have much higher exposure and interconnectedness than previously –
through both exports and bank lending. In addition, the western world is starting from an economically lower base
now than before; namely, the absence of strong underlying GDP growth would fail to cushion any shock.
When we review the potential options open to policymakers, there are also several challenges to consider. Proactive
monetary intervention may now have reached its limits. The Federal Reserve appears already to have seen some of
its hard-fought credibility undermined by Janet Yellen’s commentary. To change stance on either tapering or the
likely future direction of interest rates may only induce further uncertainty. Mario Draghi may be similarly
constrained in Europe. Consensus-building across the Eurozone is even harder than within the Fed and the fact that
the Euro has failed to weaken suggests many investors simply do not believe that the ECB is in a position to start
buying assets anytime soon. These observations lend further support to our justification for moving to a somewhat
more cautious stance. Prudence, we feel, is currently an appropriate strategy.
10
HEPTAGON FUND PLC
SEMI-ANNUAL REPORT AND UNAUDITED FINANCIAL STATEMENTS
For the half year ended 31 March 2014
INVESTMENT MANAGER’S REPORT (CONTINUED)
FOR THE HALF YEAR ENDED 31 MARCH 2014
Oppenheimer
The Oppenheimer Developing Markets Equity UCITS Fund*, (the “Fund”) managed by OFI Global Institutional,
Inc. (“OFI Global” or “Oppenheimer”) was launched on 25 June 2012 and had AUM of US$778m as of 31 March
2014. During the first quarter the Fund declined 1.9%, lagging its benchmark, the MSCI Emerging Markets Index,
which was down 0.4%. Since launch, the UCITS Fund has appreciated 22.2%, compared to the benchmark, which
has appreciated 14.4% for the same period.
Please note the OFI Global Emerging Markets Equity Composite is also provided in the table below to show a
longer track record for the underlying strategy.
ANNUALIZED TOTAL RETURNS
As of 31 March 2014 net of fees
Oppenheimer Developing Markets UCITS*
OFI Global EM Equity Composite
MSCI Emerging Markets Index
Q1 2014
(1.9%)
(1.7%)
(0.4%)
YTD
(1.9%)
(1.7%)
(0.4%)
1-Year
5.7%
6.8%
(1.4%)
3-Year
2.5%
(2.9%)
5-Year
20.1%
14.5%
* Class I Shares
Market Review
• Emerging markets sold off significantly only to rebound sharply at the end of the quarter.
As 2014 opened, the emerging markets were dominated by renewed concerns over tighter liquidity, slower growth
and political disruption. At the end of 2013, investors began taking profits on stocks that had performed particularly
well for the year and continued to do so at the start of the quarter. The MSCI Emerging Market Index declined
before investor sentiment began to turn more positive. Late in the quarter it improved sharply, especially toward the
larger markets of China, India and Brazil. Korea and Taiwan, two of the largest constituent countries in the MSCI
Emerging Market Index, benefitted as well. In all, the index rallied back to near the levels at which is opened the
year. Even the Russian market experienced some recovery from its lows.
Performance Review: Attribution & Portfolio Characteristics
• Investor profit taking followed by the sell-off in the Russian market contributed to strategy’s underperformance
in the quarter
The strategy outperformed the benchmark mostly in the Financials and Materials sectors, due to stock selection, and
in the Consumer Discretionary sector because of its relative overweight position. Stock selection caused the
portfolio to lag the benchmark in the Information Technology, Energy and Consumer Staples sectors.
With regard to regional performance, the strategy outperformed the benchmark the most in Brazil due to stock
selection along with its overweight position in India and underweight position in Korea. The strategy
underperformed the benchmark the most in Russia, and because of its allocations to South Africa (underweight) and
the United Kingdom (overweight). We remind investors that the country exposures are the result of the bottom-up
stock selection process.
11
HEPTAGON FUND PLC
SEMI-ANNUAL REPORT AND UNAUDITED FINANCIAL STATEMENTS
For the half year ended 31 March 2014
INVESTMENT MANAGER’S REPORT (CONTINUED)
FOR THE HALF YEAR ENDED 31 MARCH 2014
Oppenheimer (continued)
Individual Holdings Driving Results
During the quarter the primary positive contributors to performance were Tencent Holdings Ltd, Housing
Development and Finance Corp and Kroton Educacional SA.
Tencent Holdings Ltd
Tencent is a Chinese Internet social networking company. It provides on-line gaming and other Internet services as
well as instant messaging. Although the stock experienced some profit taking late in the quarter, it still gained
significantly overall as mobile adoption of its services, particularly its message service, continued to run ahead of
expectations. Tencent’s business model monetizes the services it provides to its customer base very effectively. So
much so that the management of Twitter recently visited the company to learn more about its approach.
Housing Development Finance Corp
HDFC is the leading provider of housing loans in India. HDFC is a public company with no state ownership and in
Oppenheimer’s opinion it is well capitalised, soundly managed, and well positioned for growth as India continues to
develop. During the quarter, the stock benefitted from increasingly positive investor sentiment towards India.
Kroton Educacional SA
Kroton Educacional is a Brazilian educational company that the strategy has owned for a long time. The stock rose
during the quarter after the company announced earnings that were significantly above expectations. In
Oppenheimer’s opinion, Kroton Educacional remains poised to benefit from the high demand for educational
services in its market.
The stocks that detracted the most from absolute performance during the quarter were Yandex NV, Baidu Inc and
NovaTek OAO.
Yandex NV
Yandex is the dominant Internet search engine in the Russian market. During 2013, the company’s strong operating
performance caused the share price to more than double. Over the quarter, Russian stocks suffered as investors sold
them due to concerns over political tension in Ukraine. Given the performance of Yandex last year, investors had an
increased likelihood of realizing a gain and was impacted by investors taking profits. In Oppenheimer’s opinion,
Yandex’s operations and growth prospects are unchanged and they have maintained the size of their investment in
the company.
Baidu Inc
Baidu is the market dominant search engine in China. After extremely strong performance last year, the shares
experienced profit-taking and volatility during the first quarter. In Oppenheimer’s opinion, Baidu will continue to
profit from the rapid development of the Chinese Internet sector. It remains the top holding in the strategy.
NovaTek OAO
NovaTek is a Russian natural gas exploration and production company. The stock price declined during the quarter
due to negative investor sentiment on Russian shares caused by political tension over Ukraine. Furthermore, one of
the key investors in the company was among the individuals sanctioned by the U.S. government. Oppenheimer have
examined the legal and practical implications and, in their opinion, this does not affect NovaTek’s day-to-day
operations and profitability. They have maintained the size of their investment position in the company.
12
HEPTAGON FUND PLC
SEMI-ANNUAL REPORT AND UNAUDITED FINANCIAL STATEMENTS
For the half year ended 31 March 2014
INVESTMENT MANAGER’S REPORT (CONTINUED)
FOR THE HALF YEAR ENDED 31 MARCH 2014
Oppenheimer (continued)
Market Outlook & Portfolio Positioning
• Expect continued market volatility
• As long-term investors Oppenheimer believe the portfolio is well-positioned
• Oppenheimer are comfortable with their investments in the Russian companies that they own
Over the past few quarters, a pattern has developed in emerging markets. Broadly, the markets experience declines
as investors focus on their macroeconomic concerns, only to rebound when valuations are perceived as attractive. In
Oppenheimer’s opinion, this is likely to continue in the short term.
We are also seeing increasing differentiation among sectors and companies as investors adjust to new realities.
Liquidity is tighter. Demand growth for commodities is slower – many of which are produced in the emerging
markets. Oppenheimer have always had a bias against cyclical industries and companies with high financial and
operating leverage. Oppenheimer’s portfolio reflects this and believe they are well positioned.
Finally, a note on Russia. The rapidly unfolding events in Ukraine and Crimea have produced a political dispute
between Russia, the United States and the Eurozone. Russia has annexed Crimea and the US has declared economic
and travel sanctions on some Russian individuals. It is unclear whether tensions will subside or escalate. If they
escalate, it is unclear what economic and diplomatic actions will be taken by the various nations involved. These
events caused a sell-off in the Russian market. The uncertainty will likely continue to weigh on the market and cause
share prices to be volatile. The strategy owns five Russian companies and their operations are unaffected by the US
sanctions. Oppenheimer have maintained the sizes of their positions in them by buying stock at extraordinary low
prices seen during the quarter. These companies compromise roughly 7% of the portfolio, the same weighting they
had at the beginning of the quarter.
Oppenheimer Global
The Oppenheimer Global Focus Equity UCITS Fund (the “Fund”), managed by OFI Global Institutional, Inc. (“OFI
Global” or “Oppenheimer”) was launched on 10 December 2013 and has AUM of USD 171m as of 31 March 2014.
During the first full quarter of the Fund’s existence, the Fund decreased 4.3% compared to an increase in the MSCI
All Country World Index of 1.1%.
Please note that due to the recent launch of the Fund, the figures below also reflect the net returns of the OFI Global
– Global Value Equity Composite, the strategy behind the Oppenheimer Global Focus Equity Fund. Further, any
historical comments about sector, country and holdings commentary are all applicable to this more established,
composite strategy.
ANNUALIZED TOTAL RETURNS
As of 31 March 2014 net of fees
OFI Global – Global Value Equity Composite
MSCI ACWI NR USD Index
Q1 2014
(2.3%)
1.7%
YTD
(2.3%)
1.7%
1-Year
27.2%
16.6%
3-Year
13.2%
8.6%
5-Year
31.1%
17.8%
13
HEPTAGON FUND PLC
SEMI-ANNUAL REPORT AND UNAUDITED FINANCIAL STATEMENTS
For the half year ended 31 March 2014
INVESTMENT MANAGER’S REPORT (CONTINUED)
FOR THE HALF YEAR ENDED 31 MARCH 2014
Oppenheimer Global (continued)
Portfolio Review
Contributors
The top contributor to the UCITS Fund during this quarter was Global Mediacom, which rose more than 32%.
Assured Guaranty Ltd rose nearly 8% following stellar results and an upgrade by S&P, while Jazztel Plc, a Spanish
alt-net continuing to expand its fibre network and take customers, rose more than 41%. UBS AG, Credit Suisse
Group AG, Bank of America Corp and MBIA Inc also all contributed meaningfully.
Detractors
Top detractors this quarter were dominated by one name, Blinkx Plc, which fell more than 44%. Please refer to the
later section on page 4 for further information. CDON Group AB, Yandex NV and Baidu Inc also meaningfully
underperformed global markets due to the macro turmoil and general sell-off in everything related to technology,
though their business results continued to progress as we at Oppenheimer envisaged. The investment team continues
to believe that each of these companies represents compelling value for our shareholders and added to every
position.
Portfolio Activity
Following a very successful year in 2013 (the strategy was up more than 43%), portfolio activity this quarter was
focused on keeping value maximised in the Fund. It is a key part of what Oppenheimer has been doing since
inception of the strategy. A few new positions were added including Prada SpA, down nearly 30% from its recent
peak on concerns over Chinese growth. Deutsche Bank AG was also added as the recent capital raises, coupled with
balance sheet cleanup, make it rather attractive value for investors with Oppenheimer’s time horizon.
Qiwi Plc, the leading digital wallet and mobile payment network in Russia, was also added. The Crimean crisis
caused significant declines in the shares of many top quality Russian companies that actually do have clean
accounting and good corporate governance. Qiwi Plc is an excellent company with a very attractive position in
mobile payments that Oppenheimer had been watching for over a year. The 45% drop in the share price during the
quarter gave the investment team a great opportunity to do something special for Fund investors.
Oppenheimer also added a meaningful position in Lululemon Athletica Inc, a high-end athletic wear manufacturer
with an iconic brand that has been in the midst of turmoil caused by manufacturing problems and poorly thought out
management comments. Oppenheimer assessed the situation and determined that the manufacturing problems had
been solved. Further, a change in the management team coupled with strong sales of the company’s new product
lines indicate to the team that the strength of the brand remains intact. With a share price decline of over 40% since
these issues began, once the manufacturing issues were resolved and the management changes implemented, the
team took a position and think it represents a great opportunity for our shareholders.
Oppenheimer also added meaningfully to numerous positions, most notable Twenty-First Century Fox Inc, Yandex
NV and Citigroup Inc. Oppenheimer believes each of these companies represents a compelling opportunity for our
shareholders at current prices with limited downside. This is the type of asymmetry the investment team has spent
the majority of its time searching for in the past seven years. It remains on offer in this market.
Oppenheimer sold positions in several names (Biostime, Diageo Plc, Fuchs Petrolub SE, ICICI Bank Ltd , Indusind
Bank, Blue Nile, Tivo, U.S. Cellular and Ziggo (acquired)) as each of these names had appreciated significantly
since purchase and no longer represented the best value for our shareholders. The investment team will continue as
always to focus its efforts on owning the best value businesses for our shareholders.
14
HEPTAGON FUND PLC
SEMI-ANNUAL REPORT AND UNAUDITED FINANCIAL STATEMENTS
For the half year ended 31 March 2014
INVESTMENT MANAGER’S REPORT (CONTINUED)
FOR THE HALF YEAR ENDED 31 MARCH 2014
Oppenheimer Global (continued)
Market Review by Randy Dishmon, Portfolio Manager
There’s always something. Bad markets amplify bad news and even good markets climb the proverbial wall of
worry. Continued debate over tapering has inspired many moments of panic in the past year, the first quarter being
no exception. It’s been clear for some time that returning to a normal state of monetary affairs is inevitable, will
likely bring higher interest rates, and will come with various uncertainties. It is decidedly not clear that any of these
possibilities has much to do with the long-term value of the companies we own or the potential investments we can
make. We remain agnostic on Fed policy when it comes to positioning the portfolio. Opportunities for our
shareholders are being created in the turmoil ensuing every time the word “tapering” hits the front page. As we’ve
said 1,000 times, making sure there is a large gap between what we’ve paid and the value of what we’ve received is
the thing we care most about. We’re currently getting several opportunities to purchase these large gaps because the
headlines are full of “tapering.” That’s fine by us.
Geopolitical turmoil also ruled during the first 90 days of 2014. Russia, enjoying the post-Olympic halo of the Sochi
games, annexed the Crimean Peninsula, making the entirety of NATO (and global markets) sit up a bit straighter.
Escalating disputes between China and Japan over five Pacific islands, along with tensions between Malaysia and
China over a missing plane carrying a large number of Chinese tourists, contribute to the growing perception of
macroeconomic decline.
As the expression goes, the more things change, the more they stay the same. Macroeconomic turmoil is the
backdrop of every market but can have very little to do with the value of a given company. A strong case can be
made that Russia’s annexation of the Crimean Peninsula may actually increase the value of Yandex NV and Qiwi
Plc, though both shares are down more than 30% since the crisis broke. That’s why we stay focused on what
matters...the gap between value and price, and the quality and integrity of the people running the company. Macro
headlines quickly become yesterday’s news. We focus on those things that withstand the test of time.
Rest assured that nothing in our philosophy and process for selecting great investments has changed. We are longterm investors that are focused on a time horizon of 3-5 years. Turmoil in the markets always creates opportunity.
We specialize in finding that opportunity and seek to capture it for our shareholders. That’s what we’ve been doing
for the past 7 years. We believe significant, attractive opportunities have been created for shareholders in the past
quarter as numerous top quality businesses in the sweet spot of positive structural trends have suffered severe
declines. I look forward to writing to you again in our next quarterly commentary.
A Note on Blinkx by Randy Dishmon, Portfolio Manager
Most of this quarter’s underperformance was due to a significant decline in Blinkx Plc (“Blinkx”). Blinkx has been a
very successful investment for our shareholders, having contributed 477 basis points to the strategy’s performance in
2013. The company is a leader in video advertising on the Internet, one of the fastest growing areas in the digital
world. I’ve often described the company as doing for video advertising what Google did for text advertising. Blinkx
facilitates video search combined with the ability to place advertising in video targeted to a specific audience, in a
contextually sensitive and brand-safe manner. Blinkx accomplishes what all great advertising platforms do – they
allow publishers better discovery and monetization of their content while allowing advertisers to expand their reach
to the right audience in an appropriate way. With over 100 patents, hundreds of millions spent in development, and
years of effort, the company is a leader in the fastest growing component of advertising over the past several years.
Unfortunately, in January, 2014, the company was the subject of a negative blog written by a Harvard professor.
Two anonymous funds paid a prominent Harvard professor with expertise in the field of Internet advertising to
perform research on Blinkx’s business practices.
15
HEPTAGON FUND PLC
SEMI-ANNUAL REPORT AND UNAUDITED FINANCIAL STATEMENTS
For the half year ended 31 March 2014
INVESTMENT MANAGER’S REPORT (CONTINUED)
FOR THE HALF YEAR ENDED 31 MARCH 2014
Oppenheimer Global (continued)
A Note on Blinkx by Randy Dishmon, Portfolio Manager (continued)
The research concluded that some of Blinkx’s business practices looked deceptive and possibly in violation of
Federal Trade Commission disclosure requirements. These conclusions were based on FTC proceedings that took
place nearly 10 years ago against a company from which Blinkx acquired assets. Further, some of the assertions
were made by assigning responsibility to Blinkx for the business practices of its contractors. Importantly, several of
the key items presented as facts by the professor were subsequently retracted when proven factually incorrect by the
company.
In spite of the factual errors undermining key points made in the blog, the blog did cause a sharp drop in the share
price of Blinkx, benefitting the large short interest that had accumulated immediately before the blog was published.
In response, the company took the following actions. The company hired DLA Piper, a leading technology law firm
to contact the Federal Trade Commission to discuss current business practices and evaluate whether or not there
were any outstanding or pending actions against the company. There were none. The company also hired Kroll, a
global leader in risk management, to evaluate current business practices with respect to legal requirements and
industry practices. Kroll reported they found Blinkx to either meet or exceed industry standards on every metric.
Blinkx then held its first Capital Markets Day ever on March 31st, bringing together investors, management, major
customers and clients. Such leading global customers/clients of Blinkx as Yahoo!, WPP and Publicis had positive
things to say about both Blinkx technology and its ability to deliver the results they wanted. Finally, several insiders
bought stock. Quite frankly, these are not the actions of a fraudulent company in the business of deceiving people.
I would hate to think that a prominent academic was used as a tool in a classic short-selling scheme we’ve seen
before by some rather shrewd hedge funds, but from the outside that is exactly what it looks like. The admitted
factual inaccuracies in the work and the conflict of interest created by the financial arrangement with the research
sponsors, leaves me wondering.
In spite of the business disruption due to this distraction, the company met its financial guidance growing 25% year
over year in revenue, while growing EBITDA 50%.
This isn’t the first time we’ve been here with a company. In public markets, this is all too common. Here is what
matters: Is this business worth owning? Absolutely. It is a leader in the sweet spot of a key structural trend that we
believe is likely to continue for years to come. It has very attractive economics and significant barriers to entry. At
what price is it worth owning? In our estimation, given the reduced growth rate that may result for a few quarters,
the operating leverage in the business, the debt free balance sheet and attractive assets, we see the potential for our
investment to appreciate meaningfully over the next 3 years. Does management know what they are doing?
Undoubtedly. I’ve known this company since before it came public and have no issues with the actions taken by the
management on behalf of shareholders. Will they treat shareholders as owners? No past actions suggest the need for
concern.
We remain convinced this is an investment that represents a great opportunity for our shareholders at this price and
have added to our position.
Heptagon Capital Limited
16
HEPTAGON FUND PLC
SEMI-ANNUAL REPORT AND UNAUDITED FINANCIAL STATEMENTS
For the half year ended 31 March 2014
INVESTMENT PORTFOLIO STATEMENT
AS AT 31 MARCH 2014
YACKTMAN
Description
Holdings
Fair Value
US$
% of
NAV
Aggreko Plc
535,400
13,397,807
0.73
Apollo Education Group Inc Class A
250,000
8,560,000
0.46
Financial assets at fair value through profit or loss
Equities (30 September 2013: 78.53%)
Avon Products Inc
1,550,100
22,693,464
1.23
Bank of America Corp
670,000
11,524,000
0.62
Bank of New York Mellon Corporation
565,000
19,938,850
1.08
Becton Dickinson & Co
90,000
10,537,200
0.57
390,000
20,432,100
1.11
3,705,000
83,029,050
4.50
315,000
27,723,150
1.50
2,419,200
93,526,272
5.07
185,000
12,000,950
0.65
Comcast Corp Class A
630,000
30,718,800
1.67
ConocoPhillips
370,000
26,029,500
1.41
Corning Inc
630,000
13,116,600
0.71
CH Robinson Worldwide Inc
Cisco Systems Inc
Clorox Co
Coca-Cola Co
Colgate-Palmolive Co
Covidien Plc
115,000
8,470,900
0.46
CR Bard Inc
454,900
67,316,102
3.65
eBay Inc
495,000
27,343,800
1.48
Exxon Mobil Corp
445,000
43,467,600
2.36
Goldman Sachs Group Inc
48,000
7,864,800
0.43
Hewlett-Packard Co
385,000
12,458,600
0.68
Intel Corp
315,000
8,130,150
0.44
Johnson & Johnson
540,000
53,044,200
2.88
Lancaster Colony Corp
65,000
6,462,300
0.35
Microsoft Corp
2,070,000
84,849,300
4.60
Oracle Corp
1,625,000
66,478,750
3.60
Patterson Cos Inc
275,000
11,484,000
0.62
PepsiCo Inc
1,820,000
151,970,001
8.23
Procter & Gamble Co
1,455,000
117,273,000
6.36
30,850
30,634,083
1.66
Sigma-Aldrich Corp
150,000
14,007,000
0.76
Staples Inc
275,000
3,118,500
0.17
State Street Corp
155,000
10,780,250
0.58
Stryker Corp
655,000
53,362,850
2.89
Sysco Corp
1,826,000
65,973,380
3.58
Twenty-First Century Fox Inc Class A
3,717,000
118,832,490
6.44
Twenty-First Century Fox Inc Class B
170,000
5,290,400
0.29
Samsung Electronics Co Ltd Class Preference
17
HEPTAGON FUND PLC
SEMI-ANNUAL REPORT AND UNAUDITED FINANCIAL STATEMENTS
For the half year ended 31 March 2014
INVESTMENT PORTFOLIO STATEMENT (CONTINUED)
AS AT 31 MARCH 2014
YACKTMAN (CONTINUED)
Description
Holdings
Fair Value
US$
% of
NAV
US Bancorp
870,000
37,288,200
2.02
Viacom Inc Class B
630,000
53,543,700
2.90
Wal-Mart Stores Inc
230,000
17,578,900
0.95
WellPoint Inc
190,000
18,914,500
1.03
Wells Fargo & Co
285,000
14,175,900
0.77
1,503,341,399
81.49
Equities (30 September 2013: 78.53%) (continued)
Total Equities
Short-term debt obligations (30 September 2013: 19.96%)
United States Treasury Bill ZCP 26/06/2014
103,000,000
102,991,389
5.58
United States Treasury Bill ZCP 18/09/2014
170,000,000
169,955,851
9.21
United States Treasury Bill ZCP 11/12/2014
47,000,000
46,973,473
2.55
319,920,713
17.34
(Cost: US$1,505,726,693)
1,823,262,112
98.83
Cash and cash equivalents
20,302,822
1.10
1,244,259
0.07
1,844,809,193
100.00
Total Short-term debt obligations
Total financial assets at fair value through profit or loss excluding financial
derivative instruments
Other net assets
Net assets attributable to holders of redeemable
participating shares
% of
Analysis of Total Assets
Total Assets
Transferable securities admitted to an official stock exchange listing
1,823,262,112
98.39
29,863,472
1.61
1,853,125,584
100.00
42,000
1,051,005
2.13
Anritsu Corp
95,000
1,093,120
2.22
Bilfinger SE
12,200
1,548,461
3.14
Bodycote Plc
132,000
1,775,915
3.61
Booker Group Plc
730,000
2,009,299
4.08
77,000
2,384,689
4.84
Other assets
Total Assets
HELICON
Financial assets at fair value through profit or loss
Equities (30 September 2013: 91.86%)
Aggreko Plc
CA Inc
18
HEPTAGON FUND PLC
SEMI-ANNUAL REPORT AND UNAUDITED FINANCIAL STATEMENTS
For the half year ended 31 March 2014
INVESTMENT PORTFOLIO STATEMENT (CONTINUED)
AS AT 31 MARCH 2014
HELICON (CONTINUED)
Description
Holdings
Fair Value
US$
% of
NAV
5,500
1,433,520
2.91
Cie de St-Gobain
25,500
1,541,125
3.13
DMG Mori Seiki AG
43,400
1,330,010
2.70
DR Horton Inc
62,300
1,348,795
2.74
Duerr AG
26,100
2,014,450
4.09
Equities (30 September 2013: 91.86%) (continued)
CF Industries Holdings Inc
Isuzu Motors Ltd
163,000
938,574
1.91
Jungheinrich AG
13,500
1,023,165
2.08
Kansas City Southern
13,350
1,362,501
2.77
Kerry Group Plc Class A
24,400
1,863,399
3.78
Kingspan Group Plc
106,000
2,017,565
4.10
Lawson Inc
14,000
992,378
2.02
Leggett & Platt Inc
65,000
2,121,600
4.31
Linde AG
6,300
1,260,768
2.56
Mondi Plc
91,100
1,593,194
3.24
147,200
1,105,793
2.25
61,600
1,192,096
2.42
Stericycle Inc
10,800
1,227,096
2.49
Svenska Cellulosa AB SCA Class B
66,500
1,953,906
3.97
Pace Plc
Parkland Fuel Corp
Telecity Group Plc
108,800
1,266,074
2.57
Valeo SA
12,100
1,705,205
3.46
Western Digital Corp
29,700
2,727,053
5.54
WH Smith Plc
88,000
1,764,912
3.58
43,645,668
88.64
43,645,668
88.64
Cash and cash equivalents
1,992,776
4.05
Other net assets
Net assets attributable to holders of redeemable
participating shares
3,600,481
7.31
49,238,925
100.00
Total Equities
Total financial assets at fair value through profit or loss excluding financial
derivative instruments
(Cost: US$38,162,512)
% of
Analysis of Total Assets
Transferable securities admitted to an official stock exchange listing
Total Assets
43,645,668
86.67
Other assets
6,711,499
13.33
Total Assets
50,357,167
100.00
19
HEPTAGON FUND PLC
SEMI-ANNUAL REPORT AND UNAUDITED FINANCIAL STATEMENTS
For the half year ended 31 March 2014
INVESTMENT PORTFOLIO STATEMENT (CONTINUED)
AS AT 31 MARCH 2014
OPPENHEIMER
Description
Holdings
Fair Value
US$
% of
NAV
Financial assets at fair value through profit or loss
Equities (30 September 2013: 94.86%)
AIA Group Ltd
1,534,600
7,280,252
0.94
Airports of Thailand PCL
156,700
937,109
0.12
Almacenes Exito SA
241,693
3,644,304
0.47
Almacenes Exito SA GDR
215,200
3,220,791
0.41
3,507,282
3,599,524
0.46
Alrosa AO
AMBEV SA
319,740
2,369,273
0.30
1,189,924
4,001,779
0.51
America Movil SAB de CV
544,260
10,819,889
1.39
Anadolu Efes Biracilik Ve Malt Sanayii AS
401,778
4,470,043
0.57
Apollo Hospitals Enterprise Ltd
229,823
3,509,734
0.45
Asian Paints Ltd
437,555
4,008,311
0.52
Ambuja Cements Ltd
Astra International Tbk PT
19,250,500
12,497,574
1.61
B2W Compania Digital
218,700
2,683,715
0.34
Baidu Inc
216,410
32,976,557
4.25
Banco Bradesco SA
440,530
6,022,045
0.77
Banco Davivienda SA
254,000
3,287,909
0.42
Bancolombia SA
72,180
4,076,726
0.52
Bancolombia SA Class Preference
44,053
614,110
0.08
Bangkok Dusit Medical Services PCL Class F
BIM Birlesik Magazalar AS
BM&FBovespa SA
13,200
54,118
0.01
170,419
3,839,845
0.49
2,848,900
14,203,468
1.83
CapitaMalls Asia Ltd
740,000
1,053,318
0.14
Carlsberg Class B
145,457
14,473,200
1.86
Cementos Argos SA
345,463
1,762,065
0.23
2,483,258
8,201,776
1.05
Cencosud SA
China Life Insurance Co Ltd Class H
12,000
34,034
0.00
China Oilfield Services Ltd Class H
776,000
1,822,693
0.23
Cie Financiere Richemont SA
Cipla Ltd/India
CNOOC Ltd
Colgate-Palmolive India Ltd
Commercial International Bank Egypt SAE
91,328
8,725,967
1.12
605,872
3,875,816
0.50
5,971,000
8,975,301
1.15
144,872
3,334,075
0.43
797,020
4,146,707
0.53
5,335,100
7,154,034
0.92
67,520
3,404,358
0.44
Cyrela Brazil Realty SA Empreendimentos e Participacoes
237,200
1,435,919
0.18
Diageo Plc
198,680
6,164,178
0.79
1,088,030
3,206,384
0.41
531,400
3,567,786
0.46
CP ALL PCL
Ctrip.com International Ltd
DLF Ltd
Diagnosticos da America SA
20
HEPTAGON FUND PLC
SEMI-ANNUAL REPORT AND UNAUDITED FINANCIAL STATEMENTS
For the half year ended 31 March 2014
INVESTMENT PORTFOLIO STATEMENT (CONTINUED)
AS AT 31 MARCH 2014
OPPENHEIMER (CONTINUED)
Description
Holdings
Fair Value
US$
% of
NAV
75,436
1,350,304
0.17
DP World Ltd GBP
332,650
6,017,165
0.77
Embraer SA
188,760
6,699,092
0.86
Estacio Participacoes SA
782,500
7,927,299
1.02
Eurasia Drilling Co Ltd
104,400
2,675,772
0.34
1,040,208
9,706,349
1.25
206,450
3,379,878
0.43
3,096,700
9,483,081
1.22
637,875
566,479
0.07
2,619,180
13,483,955
1.73
33,892
416,509
0.05
Grupo Financiero Banorte SAB de CV Class O
642,213
4,345,319
0.56
Grupo Financiero Inbursa SAB de CV Class O
1,637,611
4,233,097
0.54
313,090
10,422,766
1.34
Guaranty Trust Bank Plc
9,446,537
1,460,539
0.19
Haci Omer Sabanci Holding AS
2,005,624
7,781,731
1.00
Equities (30 September 2013: 94.86%) (continued)
DP World Ltd
Fomento Economico Mexicano SAB de CV
Genel Energy Plc
Genting Bhd
Genting Bhd - Warrants 18/12/2018
Glencore Xstrata Plc
Grupo Aeroportuario del Sureste SAB de CV Class B
Grupo Televisa SAB
774,000
3,896,417
0.50
3,876,000
11,117,757
1.43
Hindustan Unilever Ltd
146,960
1,490,208
0.19
Home Inns & Hotels Management Inc
105,010
3,390,773
0.44
Hong Kong Exchanges & Clearing Ltd
324,180
4,914,699
0.63
1,283,099
18,906,227
2.44
283,590
12,421,242
1.60
1,810,000
3,724,362
0.48
284,362
15,650,683
2.01
Hang Lung Group Ltd
Hang Lung Properties Ltd
Housing Development Finance Corp
ICICI Bank Ltd
Indocement Tunggal Prakarsa Tbk PT
Infosys Ltd
InRetail Peru Corp
International Container Terminal Services Inc
Jardine Strategic Holdings Ltd
80,120
1,129,692
0.15
289,000
695,997
0.09
189,501
6,795,506
0.87
1,012,800
3,861,942
0.50
Kroton Educacional SA
352,797
7,801,715
1.00
Localiza Rent a Car SA
15,300
225,110
0.03
1,465,600
10,866,159
1.40
Jollibee Foods Corp
Lojas Americanas SA
LVMH Moet Hennessy Louis Vuitton SA
43,350
7,883,635
1.01
Magnit OJSC
74,317
17,131,332
2.20
Marico Kaya Enterprises Ltd
9,197
645
0.00
510,640
1,779,727
0.23
MercadoLibre Inc
61,340
5,834,047
0.75
Mindray Medical International Ltd
86,980
2,814,673
0.36
415,087
8,506,641
1.09
19,100
409,848
0.05
Marico Ltd
MTN Group Ltd
Multiplan Empreendimentos Imobiliarios SA
21
HEPTAGON FUND PLC
SEMI-ANNUAL REPORT AND UNAUDITED FINANCIAL STATEMENTS
For the half year ended 31 March 2014
INVESTMENT PORTFOLIO STATEMENT (CONTINUED)
AS AT 31 MARCH 2014
OPPENHEIMER (CONTINUED)
Description
Holdings
Fair Value
US$
% of
NAV
22,051
2,434,774
0.31
528,600
8,929,861
1.15
10,976
7,981,046
1.03
Equities (30 September 2013: 94.86%) (continued)
Naspers Ltd Class N
Natura Cosmeticos SA
NAVER Corp
New Oriental Education & Technology Group Inc
Nigerian Breweries Plc
NovaTek OAO GDR
Old Mutual Plc
Pernod Ricard SA
329,740
9,677,869
1.24
3,499,148
3,288,049
0.42
165,300
18,183,000
2.35
1,685,287
5,673,757
0.73
91,640
10,672,589
1.37
Petroleo Brasileiro SA Class A
1,165,800
16,169,646
2.08
Prada SpA
1,888,200
14,617,208
1.88
175,670
8,771,404
1.13
36,441
1,073,304
0.14
Semen Indonesia Persero Tbk PT
2,814,000
3,913,838
0.50
Shandong Weigao Group Medical Polymer Co Ltd Class H
3,429,000
3,903,297
0.50
SABMiller Plc
Salvatore Ferragamo SpA
Shinsegae Co Ltd
Sinopharm Group Co Ltd Class H
SM Investments Corp
SM Prime Holdings Inc
SOHO China Ltd
Sul America SA
Taiwan Semiconductor Manufacturing Co Ltd
Tata Consultancy Services Ltd
Telefonica Brasil SA Preference
12,229
2,648,114
0.34
1,837,600
5,034,001
0.65
335,147
5,268,784
0.68
14,412,000
4,692,055
0.60
5,494,500
4,519,103
0.58
544,287
3,654,309
0.47
4,285,000
16,674,247
2.14
195,151
6,989,459
0.90
600
12,771
0.00
Telefonica Brasil SA ADR
325,150
6,906,186
0.89
Tenaris SA
259,720
11,492,610
1.48
284,400
19,779,916
2.55
4,280,000
12,304,162
1.58
Tencent Holdings Ltd
Tingyi Cayman Islands Holding Corp
Tsingtao Brewery Co Ltd Class H
392,000
2,875,423
0.37
Tullow Oil Plc
914,900
11,416,687
1.47
Turkiye Garanti Bankasi AS
1,603,506
5,486,941
0.71
Ulker Biskuvi Sanayi AS
268,974
1,892,324
0.24
Ultratech Cement Ltd
190,955
6,988,974
0.90
Unilever Indonesia Tbk PT
617,500
1,589,954
0.20
4,689,000
6,975,727
0.90
Yandex NV Class A
588,392
17,763,554
2.28
Youku Tudou Inc
125,130
3,508,645
0.45
1,622,767
7,390,726
0.95
36,273,090
437,300
0.06
Want Want China Holdings Ltd
Zee Entertainment Enterprises Ltd
Zee Entertainment Enterprises Ltd Preferred 05/03/2022
22
HEPTAGON FUND PLC
SEMI-ANNUAL REPORT AND UNAUDITED FINANCIAL STATEMENTS
For the half year ended 31 March 2014
INVESTMENT PORTFOLIO STATEMENT (CONTINUED)
AS AT 31 MARCH 2014
OPPENHEIMER (CONTINUED)
Description
Holdings
Fair Value
US$
% of
NAV
16,028,908
1,943,723
0.25
734,188,396
94.36
(Cost: US$705,290,803)
734,188,396
94.36
Cash and cash equivalents
42,338,203
5.44
1,559,531
0.20
778,086,130
100.00
Equities (30 September 2013: 94.86%) (continued)
Zenith Bank Plc
Total Equities
Total financial assets at fair value through profit or loss excluding financial
derivative instruments
Other net assets
Net assets attributable to holders of redeemable
participating shares
% of
Analysis of Total Assets
Total Assets
Transferable securities admitted to an official stock exchange listing
734,188,396
93.51
Other assets
50,957,181
6.49
Total Assets
785,145,577
100.00
Holdings
Fair Value
US$
% of
NAV
Alliance Grain Traders Inc
2,573
40,935
0.22
Areva SA
2,966
75,626
0.41
Astarta Holding NV
3,983
58,004
0.32
Barrick Gold Corp
29,692
529,408
2.90
Bit-isle Inc
18,700
111,672
0.61
KOPERNIK
Description
Financial assets at fair value through profit or loss
Equities (30 September 2013: 0.00%)
BrasilAgro - Co Brasileira de Propriedades Agricolas
11,183
42,272
0.23
Cameco Corp
23,681
542,295
2.98
Centamin Plc
48,278
40,807
0.22
Centerra Gold Inc
65,334
304,843
1.67
124,263
584,036
3.20
32,000
292,895
1.61
614,000
316,615
1.74
Centrais Eletricas Brasileiras SA Class B
China Mobile Ltd
China Yurun Food Group Ltd
Cresud SACIF y A
9,211
85,570
0.47
Detour Gold Corp
11,644
100,959
0.55
Dundee Precious Metals Inc
34,704
125,453
0.69
23
HEPTAGON FUND PLC
SEMI-ANNUAL REPORT AND UNAUDITED FINANCIAL STATEMENTS
For the half year ended 31 March 2014
INVESTMENT PORTFOLIO STATEMENT (CONTINUED)
AS AT 31 MARCH 2014
KOPERNIK (CONTINUED)
Description
Holdings
Fair Value
US$
% of
NAV
520,000
37,690
0.21
Equities (30 September 2013: 0.00%) (continued)
Eastern Platinum Ltd
Electricite de France
ERG SpA
Federal Grid Co Unified Energy System JSC
6,559
259,582
1.42
16,707
270,560
1.48
93,614,703
205,952
1.13
Federal Grid Co Unified Energy System JSC GDR
395,727
356,154
1.95
Gabriel Resources Ltd
259,489
211,588
1.16
Gazprom OAO
101,847
784,221
4.31
Golden Agri-Resources Ltd
465,000
212,616
1.17
Guangshen Railway Co Ltd Class H
378,000
159,834
0.88
Guoco Group Ltd
6,000
71,470
0.39
Japan Digital Laboratory Co Ltd
4,000
57,795
0.32
127,000
570,967
3.13
Kamigumi Co Ltd
13,000
126,611
0.69
Kernel Holding SA
14,997
145,235
0.80
Kinross Gold Corp
86,946
359,956
1.97
Kirkland Lake Gold Inc
11,953
36,495
0.20
KT Corp
26,336
365,807
2.01
7,300
158,710
0.87
Japan Steel Works Ltd
Kurita Water Industries Ltd
Layne Christensen Co
11,845
215,461
1.18
182,000
55,841
0.31
16,223
213,332
1.17
Mitsubishi Corp
9,100
169,302
0.93
Mitsui & Co Ltd
11,700
165,755
0.91
139,327
229,583
1.26
67,832
621,785
3.41
Luks Group Vietnam Holdings Co Ltd
MHP SA
Moscow Exchange MICEX-RTS OAO
Newcrest Mining Ltd
Newmont Mining Corp
30,400
712,575
3.92
Niko Resources Ltd
102,105
198,891
1.09
Northern Dynasty Minerals Ltd
147,424
144,476
0.79
94,542
341,297
1.87
Organo Corp
34,000
158,470
0.87
Peabody Energy Corp
38,899
635,609
3.50
Protek
46,072
53,757
0.29
396,238
601,489
3.30
11,000
73,807
0.40
Sberbank of Russia
34,039
330,859
1.82
Silver Standard Resources Inc
20,299
201,569
1.11
SkyWest Inc
33,376
425,878
2.34
2,036
15,392
0.08
Novagold Resources Inc
RusHydro JSC
Sanshin Electronics Co Ltd
SLC Agricola SA
24
HEPTAGON FUND PLC
SEMI-ANNUAL REPORT AND UNAUDITED FINANCIAL STATEMENTS
For the half year ended 31 March 2014
INVESTMENT PORTFOLIO STATEMENT (CONTINUED)
AS AT 31 MARCH 2014
KOPERNIK (CONTINUED)
Description
Holdings
Fair Value
US$
% of
NAV
3,243
41,997
0.23
Equities (30 September 2013: 0.00%) (continued)
Solidere
Sprott Inc
66,527
217,588
1.19
251,250
235,128
1.29
Tsakos Energy Navigation Ltd
35,858
278,258
1.53
Turkcell Iletisim Hizmetleri AS
10,377
142,891
0.78
Turquoise Hill Resources Ltd
119,902
399,274
2.19
United Laboratories International Holdings Ltd
138,000
82,013
0.45
14,266
244,007
1.34
112,685
570,699
3.13
Telecom Italia SpA
UPM-Kymmene OYJ
Uranium Participation Corp
West Japan Railway Co
5,700
Total Equities
233,236
1.28
15,652,852
85.87
15,652,852
85.87
1,770,273
9.71
805,008
4.42
18,228,133
100.00
Total financial assets at fair value through profit or loss excluding financial
derivative instruments
(Cost: US$15,492,023)
Cash and cash equivalents
Other net assets
Net assets attributable to holders of redeemable
participating shares
% of
Analysis of Total Assets
Total Assets
15,652,852
82.82
Other assets
Transferable securities admitted to an official stock exchange listing
3,246,924
17.18
Total Assets
18,899,776
100.00
166,920
1,082,512
0.63
2,480
834,570
0.49
AMC Networks Inc Class A
57,964
4,236,589
2.47
Arcam AB
44,803
1,361,321
0.79
39,389
2,975,839
1.74
180,738
4,576,286
2.67
OPPENHEIMER GLOBAL
Financial assets at fair value through profit or loss
Equities (30 September 2013: 0.00%)
Abcam Plc
Amazon.com Inc
Ascent Capital Group Inc Class A
Assured Guaranty Ltd
25
HEPTAGON FUND PLC
SEMI-ANNUAL REPORT AND UNAUDITED FINANCIAL STATEMENTS
For the half year ended 31 March 2014
INVESTMENT PORTFOLIO STATEMENT (CONTINUED)
AS AT 31 MARCH 2014
OPPENHEIMER GLOBAL (CONTINUED)
Description
Holdings
Fair Value
US$
% of
NAV
32,248
4,913,950
2.87
Banco Bilbao Vizcaya Argentaria SA
125,315
1,505,733
0.88
Banco Bilbao Vizcaya Argentaria SA Rights 14/04/2014
125,315
29,362
0.02
Bank of America Corp
216,922
3,731,058
2.18
BioScrip Inc
140,980
984,040
0.57
3,337,547
6,259,715
3.65
35,162
2,713,389
1.58
515,784
1,861,534
1.09
60,075
2,384,369
1.39
Equities (30 September 2013: 0.00%) (continued)
Baidu Inc
Blinkx Plc
BNP Paribas SA
CDON Group AB
Chr Hansen Holding A/S
Christian Dior SA
24,823
4,781,169
2.79
Citigroup Inc
145,485
6,925,087
4.05
Credit Suisse Group AG
189,826
6,143,800
3.59
Deutsche Bank AG
53,446
2,392,172
1.40
eBay Inc
74,386
4,109,083
2.40
Gazprom OAO
71,720
552,244
0.32
8,312,500
1,719,575
1.00
Google Inc Class A
3,646
4,063,503
2.37
Grupo Televisa SAB
84,174
2,802,152
1.64
Global Mediacom Tbk PT
Guidance Software Inc
180,554
1,996,927
1.17
Investment AB Kinnevik Class B
74,179
2,734,425
1.60
Jazztel Plc
22,328
339,740
0.20
KDDI Corp
35,100
2,036,778
1.19
6,393
2,316,452
1.35
2,065,000
798,628
0.47
76,043
3,163,389
1.85
KWS Saat AG
Labixiaoxin Snacks Group Ltd
Liberty Global Plc Class A
Liberty Interactive Corp Class A
115,783
3,342,655
1.95
Lululemon Athletica Inc
58,760
3,090,188
1.80
LVMH Moet Hennessy Louis Vuitton SA
12,110
2,202,326
1.29
Madison Square Garden Co Class A
67,596
3,838,101
2.24
MBIA Inc
152,303
2,130,719
1.24
Millicom International Cellular SA
27,809
2,828,703
1.65
Monsanto Co
25,312
2,879,746
1.68
Monster Beverage Corp
23,387
1,624,227
0.95
National Fuel Gas Co
39,104
2,738,844
1.60
Navistar International Corp
56,457
1,912,199
1.12
News Corp Class A
80,696
1,389,585
0.81
Pernod Ricard SA
25,750
2,998,900
1.75
26
HEPTAGON FUND PLC
SEMI-ANNUAL REPORT AND UNAUDITED FINANCIAL STATEMENTS
For the half year ended 31 March 2014
INVESTMENT PORTFOLIO STATEMENT (CONTINUED)
AS AT 31 MARCH 2014
OPPENHEIMER GLOBAL (CONTINUED)
Description
Holdings
Fair Value
US$
% of
NAV
260,500
2,016,620
1.18
Equities (30 September 2013: 0.00%) (continued)
Prada SpA
QIWI Plc
13,370
463,271
0.27
Quindell Plc
2,863,030
1,754,114
1.02
Rakuten Inc
224,700
3,004,437
1.75
45,910
3,485,028
2.03
Sistema JSFC
95,893
2,158,551
1.26
SoftBank Corp
27,000
2,044,958
1.19
Scripps Networks Interactive Inc Class A
Swedish Match AB
135,722
4,427,390
2.58
Syngenta AG
9,529
3,606,209
2.10
TearLab Corp
144,540
977,090
0.57
Telephone & Data Systems Inc
130,740
3,426,695
2.00
Tower Bersama Infrastructure Tbk PT
303,500
160,299
0.09
Twenty-First Century Fox Inc Class A
213,342
6,820,544
3.98
UBS AG
193,210
3,993,903
2.33
Viacom Inc Class B
52,608
4,471,154
2.61
Wirecard AG
67,066
2,784,103
1.62
Yandex NV Class A
145,058
4,379,301
2.56
Zon Optimus SGPS SA
259,413
2,037,955
1.19
169,313,206
98.82
169,313,206
98.82
Total Equities
Total financial assets at fair value through profit or loss excluding financial
derivative instruments
(Cost: US$171,844,059)
Cash and cash equivalents
Other net liabilities
Net assets attributable to holders of redeemable
participating shares
3,189,668
1.86
(1,160,880)
(0.68)
171,341,994
100.00
% of
Analysis of Total Assets
Transferable securities admitted to an official stock exchange listing
Total Assets
169,313,206
92.17
Other assets
14,374,660
7.83
Total Assets
183,687,866
100.00
27
HEPTAGON FUND PLC
SEMI-ANNUAL REPORT AND UNAUDITED FINANCIAL STATEMENTS
For the half year ended 31 March 2014
STATEMENT OF FINANCIAL POSITION
AS AT 31 MARCH 2014
Yacktman
2014
US$
Helicon
2014
US$
Oppenheimer
2014
US$
1,823,262,112
43,719,783
734,188,396
20,302,822
1,992,776
42,338,203
–
4,543,711
–
Dividend receivable
2,509,478
67,520
1,350,046
Subscriptions receivable
Amount receivable on sale of
investments
7,015,872
17,466
6,487,623
Notes
Assets
Financial assets at fair value through
profit or loss
Cash and cash equivalents
1,6,7
1
Collateral held with the broker
Other debtors
Total assets
Liabilities
Financial liabilities at fair value
through profit or loss
1,6,7
–
–
656,942
35,300
15,911
124,367
1,853,125,584
50,357,167
785,145,577
–
656,458
–
–
–
Bank overdraft
Amount payable on purchase of
investments
1
53,148
–
–
3,784,923
Investment management fees
2
2,089,944
41,902
589,469
Performance fees
2
–
33,469
–
Administration fees
3
678,700
28,682
258,052
Custodian fees
4
375,374
7,777
335,534
5,248
4,858
5,265
Audit fees
Directors' fees
5,9
4,132
4,128
3,718
Due to broker
11,386
10,355
157,396
Legal fees
10,349
4,387
12,441
Company secretary fees
Redemptions payable
Transfer agent fees
Other accrued expenses
Total liabilities (excluding net assets
attributable to holders of redeemable
participating shares)
Net assets attributable to holders of
redeemable participating shares
12,243
12,361
10,844
4,915,099
309,250
1,873,790
137,400
2,897
21,424
23,368
1,718
6,591
8,316,391
1,118,242
7,059,447
1,844,809,193
49,238,925
778,086,130
The accompanying notes form an integral part of these Financial Statements.
28
HEPTAGON FUND PLC
SEMI-ANNUAL REPORT AND UNAUDITED FINANCIAL STATEMENTS
For the half year ended 31 March 2014
STATEMENT OF FINANCIAL POSITION
AS AT 31 MARCH 2014 (CONTINUED)
Kopernik
2014
US$
Oppenheimer Global
2014
US$
Total
2014
US$
1,6,7
15,652,852
169,313,206
2,786,136,349
1
1,770,273
3,189,668
69,593,742
–
–
4,543,711
Notes
Assets
Financial assets at fair value through
profit or loss
Cash and cash equivalents
Collateral held with the broker
Dividend receivable
18,478
68,412
4,013,934
1,363,315
–
14,884,276
49,502
11,069,665
11,776,109
45,356
46,915
267,849
18,899,776
183,687,866
2,891,215,970
1,6,7
–
–
656,458
1
–
–
53,148
627,643
5,120,894
9,533,460
Subscriptions receivable
Amount receivable on sale of
investments
Other debtors
Total assets
Liabilities
Financial liabilities at fair value
through profit or loss
Bank overdraft
Amount payable on purchase of
investments
Investment management fees
2
13,146
106,571
2,841,032
Performance fees
2
–
–
33,469
Administration fees
3
8,385
13,206
987,025
Custodian fees
4
2,013
8,187
728,885
2,373
2,373
20,117
3,087
3,087
18,152
8,630
8,630
196,397
Audit fees
Directors' fees
Due to broker
Legal fees
Company secretary fees
Redemptions payable
Transfer agent fees
Other accrued expenses
Total liabilities (excluding net assets
attributable to holders of redeemable
participating shares)
Net assets attributable to holders of
redeemable participating shares
5,9
540
540
28,257
2,373
2,373
40,194
–
7,044,105
14,142,244
863
863
163,447
2,590
35,043
69,310
671,643
12,345,872
29,511,595
18,228,133
171,341,994
2,861,704,375
The accompanying notes form an integral part of these Financial Statements.
29
HEPTAGON FUND PLC
SEMI-ANNUAL REPORT AND UNAUDITED FINANCIAL STATEMENTS
For the half year ended 31 March 2014
STATEMENT OF FINANCIAL POSITION
AS AT 31 MARCH 2014 (CONTINUED)
Yacktman
2014
Helicon
2014
Oppenheimer
2014
Class A US$
Class D US$
Class A US$
US$142.05
US$120.90
US$103.60
Class AD US$ (1)
Class I US$
Class A1 US$ (4)
US$104.24
US$124.87
US$98.57
Class AE EUR (2)
Class R US$
Class B US$
EUR99.96
US$118.64
US$106.45
Class AG1 GBP
Class S US$
Class C US$
GBP95.81
US$117.89
US$122.71
Class B US$
–
Class CE EUR
US$137.60
–
EUR101.84
Class C US$
–
Class I US$
US$147.09
–
US$122.17
Class CD US$ (3)
–
Class I1 US$
US$102.70
–
US$103.32
Class I US$
–
Class IE EUR
US$143.62
–
EUR96.91
Class I1 US$
–
Class IF US$ (5)
US$126.57
–
US$104.47
Class ID US$
–
Class IG GBP
US$105.71
–
GBP101.61
Class IE EUR
–
–
EUR104.87
–
–
Class IG GBP
–
–
GBP99.10
–
–
Class IGD GBP
–
–
GBP102.99
–
–
Net Asset Value per redeemable participating share issued in
Net Asset Value per redeemable participating share issued in
Net Asset Value per redeemable participating share issued in
Net Asset Value per redeemable participating share issued in
Net Asset Value per redeemable participating share issued in
Net Asset Value per redeemable participating share issued in
Net Asset Value per redeemable participating share issued in
Net Asset Value per redeemable participating share issued in
Net Asset Value per redeemable participating share issued in
Net Asset Value per redeemable participating share issued in
Net Asset Value per redeemable participating share issued in
Net Asset Value per redeemable participating share issued in
Net Asset Value per redeemable participating share issued in
(1)
launched on 21 October 2013.
launched on 7 November 2013.
(3)
launched on 20 November 2013.
(2)
(4)
(5)
launched on 14 October 2013.
launched on 27 February 2014.
The accompanying notes form an integral part of these Financial Statements.
30
HEPTAGON FUND PLC
SEMI-ANNUAL REPORT AND UNAUDITED FINANCIAL STATEMENTS
For the half year ended 31 March 2014
STATEMENT OF FINANCIAL POSITION
AS AT 31 MARCH 2014 (CONTINUED)
Net Asset Value per redeemable participating share issued in
Net Asset Value per redeemable participating share issued in
Net Asset Value per redeemable participating share issued in
Net Asset Value per redeemable participating share issued in
(6)
(9)
(7)
(10)
launched on 16 December 2013.
launched on 16 December 2013.
(8)
launched on 7 January 2014.
Kopernik
2014
Oppenheimer Global
2014
Class C US$ (6)
Class C US$ (10)
US$105.49
US$100.01
Class CD US$ (7)
Class CE EUR (11)
US$105.49
EUR98.65
Class CE EUR (8)
–
EUR101.00
–
Class I US$ (9)
–
US$102.91
–
launched on 9 January 2014.
launched on 16 December 2013.
(11)
launched on 19 February 2014.
The accompanying notes form an integral part of these Financial Statements.
31
HEPTAGON FUND PLC
SEMI-ANNUAL REPORT AND UNAUDITED FINANCIAL STATEMENTS
For the half year ended 31 March 2014
STATEMENT OF FINANCIAL POSITION
AS AT 30 SEPTEMBER 2013
Yacktman
2013
US$
Helicon
2013
US$
Oppenheimer
2013
US$
Total
2013
US$
1,741,974,099
37,140,490
624,313,418
2,403,428,007
30,649,934
1,003,289
32,608,219
64,261,442
Notes
Assets
Financial assets at fair value through
profit or loss
Cash and cash equivalents
1,6,7
1
Collateral held with the broker
–
3,276,350
–
3,276,350
Dividend receivable
1,552,504
38,031
658,586
2,249,121
Subscriptions receivable
Amount receivable on sale of
investments
6,448,465
3,000,000
1,496,803
10,945,268
Other debtors
Total assets
Liabilities
Financial liabilities at fair value
through profit or loss
Amount payable on purchase of
investments
1,6,7
–
–
1,578,228
1,578,228
51,919
26,572
130,288
208,779
1,780,676,921
44,484,732
660,785,542
2,485,947,195
–
1,313,488
–
1,313,488
4,756,269
2,529,039
1,699,334
8,984,642
Investment management fees
2
2,100,113
32,939
504,924
2,637,976
Performance fees
2
–
394,394
–
394,394
Administration fees
3
402,969
24,778
119,655
547,402
Custodian fees
4
225,514
5,156
133,475
364,145
10,115
13,515
11,104
34,734
3,715
3,713
2,788
10,216
5,027
6,599
77,617
89,243
36,185
2,751
13,339
52,275
646
3,057
5,972
9,675
Audit fees
Directors' fees
Due to broker
Legal fees
Company secretary fees
Redemptions payable
5,9
4,358,145
11,727
39,086
4,408,958
Transfer agent fees
54,120
4,338
4,338
62,796
Other accrued expenses
19,868
178
2,925
22,971
Total liabilities (excluding net assets
attributable to holders of redeemable
participating shares)
11,972,686
4,345,672
2,614,557
18,932,915
Net assets attributable to holders
of redeemable participating shares
1,768,704,235
40,139,060
658,170,985
2,467,014,280
The accompanying notes form an integral part of these Financial Statements.
32
HEPTAGON FUND PLC
SEMI-ANNUAL REPORT AND UNAUDITED FINANCIAL STATEMENTS
For the half year ended 31 March 2014
STATEMENT OF FINANCIAL POSITION
AS AT 30 SEPTEMBER 2013 (CONTINUED)
Yacktman
2013
Helicon
2013
Oppenheimer
2013
Class A US$
Class D US$
Class A US$ (7)
US$132.83
US$113.77
US$102.24
Class AG1 GBP (1)
Class I US$
Class B US$ (8)
GBP92.24
US$117.35
US$105.29
Class B US$
Class IH CHF
Class C US$
US$128.96
CHF112.28
US$120.74
Net Asset Value per redeemable participating share issued in
Net Asset Value per redeemable participating share issued in
Net Asset Value per redeemable participating share issued in
Net Asset Value per redeemable participating share issued in
Class C US$
US$137.20
US$111.86
EUR102.03
Class I US$
Class S US$
Class I US$
US$134.07
US$110.88
US$120.36
Class I1 US$ (2)
–
Class I1 US$ (10)
US$118.15
–
US$101.79
Net Asset Value per redeemable participating share issued in
Net Asset Value per redeemable participating share issued in
Class R US$ Class CE EUR (9)
Class ID US$ (3)
Net Asset Value per redeemable participating share issued in
US$98.68
Class IE EUR (4)
Net Asset Value per redeemable participating share issued in
Net Asset Value per redeemable participating share issued in
Net Asset Value per redeemable participating share issued in
(1)
(7)
(2)
(8)
launched on 11 July 2013.
launched on 31 December 2012.
(3)
launched on 25 July 2013.
(4)
launched on 25 June 2013.
(5)
launched on 14 May 2013.
(6)
launched on 16 April 2013.
– Class IE EUR (11)
–
EUR97.21
– Class IG GBP (12)
EUR99.67
–
GBP103.06
Class IG GBP (5)
–
–
GBP95.23
–
–
Class IGD GBP (6)
–
–
GBP98.97
–
–
launched on 3 January 2013.
launched on 18 October 2012.
(9)
launched on 6 September 2013.
(10)
launched on 30 May 2013.
(11)
launched on 8 May 2013.
(12)
launched on 20 August 2013.
The accompanying notes form an integral part of these Financial Statements.
33
HEPTAGON FUND PLC
SEMI-ANNUAL REPORT AND UNAUDITED FINANCIAL STATEMENTS
For the half year ended 31 March 2014
STATEMENT OF COMPREHENSIVE INCOME
FOR THE HALF YEAR ENDED 31 MARCH 2014
Yacktman
2014
US$
Helicon
2014
US$
Oppenheimer
2014
US$
16,395,513
264,719
3,794,563
47,503
935
13,822
Notes
Income
Interest and dividend income
1
Other Income
Net realised gains on financial assets at fair
value through profit or loss
1
59,762,877
563,181
19,040,851
Net realised losses on foreign exchange
1
(26,782)
(8,671)
(188,874)
Net change in unrealised gains/(losses) on
financial assets at fair value through the profit
or loss
1
66,315,543
2,661,172
(2,975,231)
Net change in unrealised (losses)/gains on
foreign exchange
1
(2,747)
7,510
12,654
142,491,907
3,488,846
19,697,785
Investment income
Expenses
Investment management fees
2
(11,634,870)
(176,598)
(3,390,710)
Performance fees
2
–
(347,938)
–
Administration fees
3
(506,521)
(26,367)
(204,488)
Custodian fees
4
(278,497)
(7,168)
(284,383)
(5,781)
(2,055)
(4,818)
–
(5,183)
–
(7,810)
(7,809)
(8,496)
(6,388)
(4,743)
(4,497)
Audit fees
Broker fees
Directors' fees
5,9
Insurance expense
Interest expense
Legal fees
Company secretary fees
Set-up fees
Transaction costs
Transfer agent fees
Other expenses
Operating expenses
Withholding tax on dividends
Net increase in net assets attributable to
holders of redeemable participating shares
from operations
1
(2,205)
(2,727)
(164)
(112,519)
(16,269)
(82,586)
(16,288)
(14,028)
(10,195)
(10,041)
(3,950)
(10,720)
(527,602)
(84,445)
(793,584)
(137,590)
(1,755)
(22,578)
(14,541)
(4,023)
(304,648)
(13,260,653)
(705,058)
(5,121,867)
(4,849,894)
(39,379)
(203,629)
124,381,360
2,744,409
14,372,289
The accompanying notes form an integral part of these Financial Statements.
34
HEPTAGON FUND PLC
SEMI-ANNUAL REPORT AND UNAUDITED FINANCIAL STATEMENTS
For the half year ended 31 March 2014
STATEMENT OF COMPREHENSIVE INCOME
FOR THE HALF YEAR ENDED 31 MARCH 2014 (CONTINUED)
Kopernik* Oppenheimer Global*
2014
2014
US$
US$
Total
2014
US$
Notes
Income
Interest and dividend income
1
Other Income
33,711
118,447
20,606,953
–
–
62,260
Net realised gains on financial assets at fair
value through profit or loss
1
609,743
711,555
80,688,207
Net realised gains/(losses) on foreign
exchange
1
18,326
(142,864)
(348,865)
Net change in unrealised gains/(losses) on
financial assets at fair value through the profit
or loss
1
160,829
(2,530,853)
63,631,460
Net change in unrealised (losses)/gains on
foreign exchange
1
(417)
(3,684)
13,316
822,192
(1,847,399)
164,653,331
(40,542)
(163,734)
(15,406,454)
Investment income/(expense)
Expenses
Investment management fees
2
Performance fees
2
–
–
(347,938)
Administration fees
3
(8,385)
(13,206)
(758,967)
Custodian fees
4
(2,013)
(8,187)
(580,248)
(2,373)
(2,373)
(17,400)
–
–
(5,183)
(3,087)
(3,087)
(30,289)
(791)
(791)
(17,210)
Audit fees
Broker fees
Directors' fees
5,9
Insurance expense
Interest expense
(156)
(1,350)
(6,602)
Legal fees
(3,955)
(3,955)
(219,284)
Company secretary fees
(2,373)
(2,373)
(45,257)
Set-up fees
(2,769)
(2,769)
(30,249)
Transaction costs
1
(49,761)
(205,990)
(1,661,382)
Transfer agent fees
(863)
(863)
(163,649)
Other expenses
(266)
(322)
(323,800)
(117,334)
(409,000)
(19,613,912)
(6,534)
(26,256)
(5,125,692)
698,324
(2,282,655)
139,913,727
Operating expenses
Withholding tax on dividends
Net increase/(decrease) in net assets
attributable to holders of redeemable
participating shares from operations
* For the period from 10 December 2013 to 31 March 2014.
The accompanying notes form an integral part of these Financial Statements.
35
HEPTAGON FUND PLC
SEMI-ANNUAL REPORT AND UNAUDITED FINANCIAL STATEMENTS
For the half year ended 31 March 2014
STATEMENT OF COMPREHENSIVE INCOME
FOR THE HALF YEAR ENDED 31 MARCH 2013
Yacktman
2013
US$
Helicon
2013
US$
Oppenheimer
2013
US$
Total
2013
US$
Notes
Income
Interest and dividend income
1
13,025,648
233,493
998,640
14,257,781
Net realised gains on financial assets at
fair value through profit or loss
1
7,841,695
414,212
3,326,631
11,582,538
Net realised losses on foreign exchange
1
(6,884)
(11,361)
(123,449)
(141,694)
Net change in unrealised gains on
financial assets at fair value through the
profit or loss
Net change in unrealised gains/(losses) on
foreign exchange
1
131,231,489
1,821,271
2,824,485
135,877,245
1
3,211
554
(4,644)
(879)
152,095,159
2,458,169
7,021,663
161,574,991
(7,636,437)
(33,953)
(691,325)
(8,361,715)
Investment income
Expenses
Investment management fees
2
Performance fees
2
–
(247,028)
–
(247,028)
Administration fees
3
(343,099)
(29,997)
(49,257)
(422,353)
Custodian fees
4
(190,553)
(4,944)
(21,001)
(216,498)
(4,555)
(4,482)
(4,482)
(13,519)
Audit fees
Broker fees
Directors' fees
5,9
Insurance expense
Interest expense
–
(4,247)
–
(4,247)
(7,253)
(7,136)
(7,136)
(21,525)
(1,864)
(1,835)
(1,834)
(5,533)
(539)
(133)
(2,318)
(2,990)
Legal fees
(84,579)
(4,482)
(4,482)
(93,543)
Company secretary fees
(15,375)
(14,325)
(10,486)
(40,186)
Set-up fees
(10,041)
(3,884)
(10,543)
(24,468)
(230,051)
(70,413)
(524,495)
(824,959)
(44,754)
(2,934)
(2,934)
(50,622)
(7,201)
(546)
(12,014)
(19,761)
Operating expenses
(8,576,301)
(430,339)
(1,342,307)
(10,348,947)
Withholding tax on dividends
(3,877,016)
(24,358)
(51,318)
(3,952,692)
139,641,842
2,003,472
5,628,038
147,273,352
Transaction costs
Transfer agent fees
Other expenses
Net increase in net assets attributable
to holders of redeemable participating
shares from operations
1
The accompanying notes form an integral part of these Financial Statements.
36
HEPTAGON FUND PLC
SEMI-ANNUAL REPORT AND UNAUDITED FINANCIAL STATEMENTS
For the half year ended 31 March 2014
STATEMENT OF CHANGES IN NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE
PARTICIPATING SHARES FOR THE HALF YEAR ENDED 31 MARCH 2014
Net assets attributable to the holders of
redeemable participating shares at the beginning
of the period
Increase in net assets attributable to the holders of
redeemable participating shares from operations
Proceeds from shares issued
Payments for shares redeemed
(Decrease)/increase in net assets resulting from
share transactions
Net assets attributable to the holders of
redeemable participating shares at the end of the
period
Yacktman
2014
US$
Helicon
2014
US$
Oppenheimer
2014
US$
1,768,704,235
40,139,060
658,170,985
124,381,360
2,744,409
14,372,289
509,508,136
(557,784,538)
11,403,355
(5,047,899)
162,343,236
(56,800,380)
(48,276,402)
6,355,456
105,542,856
1,844,809,193
49,238,925
778,086,130
Kopernik* Oppenheimer Global*
2014
2014
US$
US$
Total
2014
US$
Net assets attributable to the holders of
redeemable participating shares at the beginning
of the period
–
–
2,467,014,280
698,324
(2,282,655)
139,913,727
Proceeds from shares issued
Payments for shares redeemed
17,529,809
–
180,668,754
(7,044,105)
881,453,290
(626,676,922)
Increase in net assets resulting from share
transactions
17,529,809
173,624,649
254,776,368
Net assets attributable to the holders of
redeemable participating shares at the end of the
period
18,228,133
171,341,994
2,861,704,375
Increase/(decrease) in net assets attributable to the
holders of redeemable participating shares from
operations
* For the period from 10 December 2013 to 31 March 2014. The accompanying notes form an integral part of these Financial Statements.
37
HEPTAGON FUND PLC
SEMI-ANNUAL REPORT AND UNAUDITED FINANCIAL STATEMENTS
For the half year ended 31 March 2014
STATEMENT OF CHANGES IN NET ASSETS ATTRIBUTABLE TO HOLDERS OF
REDEEMABLE PARTICIPATING SHARES FOR THE HALF YEAR ENDED 31 MARCH 2013
Net assets attributable to the holders of
redeemable participating shares at the beginning
of the period
Increase in net assets attributable to the holders of
redeemable participating shares from operations
Proceeds from shares issued
Payments for shares redeemed
Increase in net assets resulting from share
transactions
Net assets attributable to the holders of
redeemable participating shares at the end of the
period
Yacktman
2013
US$
Helicon
2013
US$
Oppenheimer
2013
US$
Total
2013
US$
1,155,165,175
17,598,453
29,203,055
1,201,966,683
139,641,842
2,003,472
5,628,038
147,273,352
385,786,529
(159,505,933)
9,386,107
(1,782,438)
236,575,200
(4,042,298)
631,747,836
(165,330,669)
226,280,596
7,603,669
232,532,902
466,417,167
1,521,087,613
27,205,594
267,363,995
1,815,657,202
The accompanying notes form an integral part of these Financial Statements.
38
HEPTAGON FUND PLC
SEMI-ANNUAL REPORT AND UNAUDITED FINANCIAL STATEMENTS
For the half year ended 31 March 2014
STATEMENT OF CASH FLOWS
FOR THE HALF YEAR ENDED 31 MARCH 2014
Yacktman
2014
US$
Helicon
2014
US$
Oppenheimer
2014
US$
124,381,360
2,744,409
14,372,289
(81,288,013)
–
(940,355)
(4,266,397)
(7,236,323)
(1,267,361)
(18,828)
(2,867,923)
(109,874,978)
–
235,747
2,610,186
37,886,595
(8,646,026)
(92,656,756)
509,508,136
(557,784,538)
(567,407)
556,954
11,403,355
(5,047,899)
2,982,534
297,523
162,343,236
(56,800,380)
(4,990,820)
1,834,704
Net cash from financing activities
(48,286,855)
9,635,513
102,386,740
Net (decrease)/increase in cash and cash
equivalents
(10,400,260)
989,487
9,729,984
Cash and cash equivalents at beginning of period
30,649,934
1,003,289
32,608,219
Cash and cash equivalents at end of period
20,249,674
1,992,776
42,338,203
147,171
443
5,313
10,441,474
2,205
195,408
2,727
2,894,161
164
Cash flows from operating activities:
Net increase in net assets resulting from operations
Adjustments to reconcile net increase in net assets
resulting from operations to net cash provided
by/(used in) operating activities
Changes in operating assets and liabilities:
Increase in financial assets at fair value through
profit or loss
Increase in collateral held with the broker
(Increase)/decrease in debtors and other receivables
(Decrease)/increase in payables
Net cash provided by/(used in) operating
activities
Cash flows from financing activities
Proceeds from issuance of shares
Payments for redemption of shares
(Increase)/decrease in subscriptions receivable
Increase in redemptions payable
Supplementary disclosures of cash flow
information:
Interest received during the period
Dividends (net of withholding tax) received during
the period
Interest paid during the period
The accompanying notes form an integral part of these Financial Statements.
39
HEPTAGON FUND PLC
SEMI-ANNUAL REPORT AND UNAUDITED FINANCIAL STATEMENTS
For the half year ended 31 March 2014
STATEMENT OF CASH FLOWS
FOR THE HALF YEAR ENDED 31 MARCH 2014 (CONTINUED)
Kopernik* Oppenheimer Global*
2014
2014
US$
US$
Total
2014
US$
Cash flows from operating activities:
Net increase/(decrease) in net assets resulting from
operations
698,324
(2,282,655)
139,913,727
Changes in operating assets and liabilities:
Increase in financial assets at fair value through
profit or loss
Increase in collateral held with the broker
Increase in debtors and other receivables
Increase in payables
(15,652,852)
–
(113,336)
671,643
(169,313,206)
–
(11,184,992)
5,301,767
(383,365,372)
(1,267,361)
(12,021,764)
1,449,276
Net cash used in operating activities
(14,396,221)
(177,479,086)
(255,291,494)
Cash flows from financing activities
Proceeds from issuance of shares
Payments for redemption of shares
Increase in subscriptions receivable
Increase in redemptions payable
17,529,809
–
(1,363,315)
–
180,668,754
(7,044,105)
–
7,044,105
881,453,290
(626,676,922)
(3,939,008)
9,733,286
Net cash from financing activities
16,166,494
180,668,754
260,570,646
1,770,273
3,189,668
5,279,152
–
–
64,261,442
1,770,273
3,189,668
69,540,594
60
30
153,017
8,639
156
23,749
1,350
13,563,431
6,602
Adjustments to reconcile net increase/(decrease) in
net assets resulting from operations to net cash used
in operating activities
Net increase in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period
Supplementary disclosures of cash flow
information:
Interest received during the period
Dividends (net of withholding tax) received during
the period
Interest paid during the period
* For the period from 10 December 2013 to 31 March 2014. The accompanying notes form an integral part of these Financial Statements.
40
HEPTAGON FUND PLC
SEMI-ANNUAL REPORT AND UNAUDITED FINANCIAL STATEMENTS
For the half year ended 31 March 2014
STATEMENT OF CASH FLOWS
FOR THE HALF YEAR ENDED 31 MARCH 2013
Yacktman
2013
US$
Helicon
2013
US$
Oppenheimer
2013
US$
Total
2013
US$
139,641,842
2,003,472
5,628,038
147,273,352
Changes in operating assets and liabilities:
Increase in financial assets at fair value through
profit or loss
Increase in collateral held with the broker
Increase in debtors and other receivables
Increase in payables
(340,740,086)
–
(2,669,014)
5,402,329
(8,262,408)
(1,127,112)
(46,836)
713,694
(222,721,390)
–
(1,289,103)
1,820,228
(571,723,884)
(1,127,112)
(4,004,953)
7,937,395
Net cash used in operating activities
(198,364,929)
(6,719,190)
(216,562,227)
(421,646,346)
Cash flows from financing activities
Proceeds from issuance of shares
Payments for redemption of shares
Increase in subscriptions receivable
Increase/(decrease) in redemptions payable
385,786,529
(159,505,933)
(17,281,468)
9,999,665
9,386,107
(1,782,438)
(89,045)
(5,269)
236,575,200
(4,042,298)
(204,519)
39,029
631,747,836
(165,330,669)
(17,575,032)
10,033,425
218,998,793
7,509,355
232,367,412
458,875,560
Net increase in cash and cash equivalents
20,633,864
790,165
15,805,185
37,229,214
Cash and cash equivalents at beginning of period
39,041,845
731,974
841,927
40,615,746
Cash and cash equivalents at end of period
59,675,709
1,522,139
16,647,112
77,844,960
102,261
(705)
1,092
102,648
8,072,966
539
166,967
133
332,658
2,318
8,572,591
2,990
Cash flows from operating activities:
Net increase in net assets resulting from operations
Adjustments to reconcile net increase in net assets
resulting from operations to net cash used in
operating activities
Net cash from financing activities
Supplementary disclosures of cash flow
information:
Interest received/(paid) during the period
Dividends (net of withholding tax) received during
the period
Interest paid during the period
The accompanying notes form an integral part of these Financial Statements.
41
HEPTAGON FUND PLC
SEMI-ANNUAL REPORT AND UNAUDITED FINANCIAL STATEMENTS
For the half year ended 31 March 2014
NOTES TO THE FINANCIAL STATEMENTS
FOR THE HALF YEAR ENDED 31 MARCH 2014
1. Significant Accounting Policies
The significant accounting policies adopted by the Company are as follows:
Basis of preparation of financial statements
The financial statements presented are unaudited condensed financial statements for the half year ended 31 March
2014. The unaudited condensed financial statements should be read in conjunction with the financial statements for
the year ended 30 September 2013 which were prepared in accordance with International Financial Reporting
Standards (“IFRS”) and Irish statute comprising the Companies Act, 1963 to 2013, and the requirements of the
European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations, 2011 (as
amended) (the “UCITS Regulations”).
Financial assets at fair value through profit or loss
The Company has adopted IAS 39 and classified its investments as financial assets or liabilities at fair value through
profit or loss.
These include equities, short term debt obligations, forward foreign currency contracts and futures. These
instruments are acquired or incurred principally for the purpose of generating a profit from short-term fluctuation in
price.
Purchases and sales of investments are recognised on trade date – the date on which a Sub-Fund commits to
purchase or sell the asset. Investments are initially recognised at fair value and are derecognised when the rights to
receive cash flows from the investments have expired or the Sub-Fund has transferred substantially all risks and
rewards of ownership.
Subsequent to initial measurement financial assets and liabilities held for trading are measured at fair value. Fair
value is the amount for which an asset could be exchanged, or a liability settled, between knowledgeable, willing
parties in an arms length transaction. Instruments held by a Sub-Fund traded on an exchange are measured at fair
value based on the last traded price for financial assets and financial liabilities on such regulated market as at the
relevant valuation point in accordance with the Prospectus. If an investment is quoted, listed or normally dealt in, on
more than one market, the Directors may, in their absolute discretion, select any of such markets for the valuation
purposes. If prices for an investment are not available at the relevant time or are unrepresentative in the opinion of
the Investment Manager or the Administrator, as its delegate, such investments shall be valued at such values as
shall be certified with care and in good faith as the probable realisation value of the investment, approved for this
purpose by the Custodian.
Transaction costs on financial assets held for trading are expensed immediately. Cash and other liquid assets are
valued at their face value with interest accrued daily.
The short term debt obligations are measured on a yield basis.
Investments in Exchange Traded Funds are traded on a recognised exchange and this may not be the same as the Net
Asset Value. These traded prices are considered fair value.
Realised and unrealised gains and losses on financial assets and liabilities at fair value through profit or loss
Realised and unrealised gains and losses on investments represent the difference between disposal proceeds or
valuation and historic cost. Transaction costs are expensed to the statement of Comprehensive Income when
incurred. Realised and unrealised gains and losses on investments are recorded in the Statement of Comprehensive
Income.
42
HEPTAGON FUND PLC
SEMI-ANNUAL REPORT AND UNAUDITED FINANCIAL STATEMENTS
For the half year ended 31 March 2014
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE HALF YEAR ENDED 31 MARCH 2014
1. Significant Accounting Policies (continued)
Cash and cash equivalents
For the purposes of the Statement of Cash Flows, cash and cash equivalents includes deposits held at call with a
bank or financial institution with an original maturity of three months or less. Cash equivalents are short-term highly
liquid investments that are readily convertible to cash and which are subject to insignificant risk of decrease in
value. For the purpose of Statement of Financial Position, cash and cash equivalents comprises cash at banks,
including term deposits, and assets similar in nature to cash, which are not restricted as to use. Cash is held with an
affiliate of the Administrator.
Bank overdrafts
All bank overdraft balances are recognised as liabilities in the Statement of Financial Position and are held with an
affiliate of the Administrator.
Expenses
All expenses are recognised in the Statement of Comprehensive Income on an accruals basis.
Futures
Futures are contracts for delayed delivery of currency, commodities, securities or money market instruments in
which the seller agrees to make delivery at a specified future date of a specified commodity or instrument, at a
specified price or yield. Gains and losses on futures are recorded by the Company based upon market fluctuations
and are recorded as realised or unrealised gains or losses in the Statement of Comprehensive Income.
Forward foreign currency contracts
Forward foreign currency contracts are commitments either to purchase or sell a designated currency at a specified
future date for a specified price and may be settled in cash. Forward foreign currency contracts may be entered into
in order to protect the Company against adverse movement in the value of the functional currency or for the
speculative aim of enhancing return. All commitments are marked to market at the applicable translation rates and
any resulting unrealised gains or losses are recorded in the Statement of Financial Position. The Company records
realised gains or losses upon closing of the forward foreign currency contracts.
Where the Company enters into forward foreign currency contracts as a way of managing foreign exchange risk for
specific share classes, gains or losses from these contracts are allocated solely to the corresponding share classes.
Purchases and sales of forward foreign currency contracts having the same notional value, settlement date and
counterparty (which result in a net foreign currency position of zero with the counterparty) are generally offset and
considered “offset forward currency contracts” and any realised gains or losses are recognised on settlement date.
Forward foreign currency contracts result in credit exposure to the counterparty.
The fair value of non-exchange traded derivatives is estimated based on the amount that the Company would receive
or pay to terminate the contract at the year end date, taking into account current market conditions (volatility,
appropriate yield curve) and the current creditworthiness of the counterparties.
The fair value of a forward foreign currency contract is determined as the net present value of estimated future cash
flows, discounted at appropriate market rates on the valuation date.
Investment income and expense
Interest income and interest expense are recognised on an accruals basis in line with the contractual terms. Interest is
accrued on a daily basis.
43
HEPTAGON FUND PLC
SEMI-ANNUAL REPORT AND UNAUDITED FINANCIAL STATEMENTS
For the half year ended 31 March 2014
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE HALF YEAR ENDED 31 MARCH 2014
1. Significant Accounting Policies (continued)
Redeemable participating shares
Redeemable participating shares are redeemable at the shareholder’s option.
The Company has non-participating shares in issue that are classified as ‘equity’ in accordance with IFRS.
The redeemable participating shares do not represent the most ‘subordinate’ class of instrument and are classified as
financial liabilities. Redeemable participating shares have priority over other claims to the assets of the entity on
liquidation.
The redeemable participating shares can be put back to the Company on any dealing day for cash equal to a
proportionate share of the Company’s net asset value.
Each Sub-Fund provides its shareholders with the right to redeem their interest in the Sub-Fund at any dealing date
for cash equal to their proportionate share of the net asset value of that segregated portfolio. Under the amendments
to IAS 32, this right represents in substance a liability of the Sub-Fund to shareholders.
The Company’s non-participating shares do not participate in the profits of the Company.
Dividend income
Dividends are credited to the Statement of Comprehensive Income on the dates on which the relevant securities are
listed as “ex-dividend”. Income is shown gross of any non-recoverable withholding taxes and net of any tax credits.
2. Investment Management Fees
Yacktman
The Investment Manager is entitled to receive out of the assets of Yacktman an annual fee of 1.50% in respect of
Class A US$, Class AD US$, Class AE EUR and AG1 GBP, of 1.95% in respect of Class B US$, of 1.00% in
respect of Class C US$ and Class CD US$, and of 1.15% in respect of Class I US$, Class I1 US$, Class ID US$,
Class IE EUR, Class IG GBP and Class IGD GBP, accrued daily and payable monthly in arrears (before deduction
of fees, expenses, borrowings and interest). The Investment Manager is entitled to be reimbursed by Yacktman for
reasonable out of pocket expenses incurred by it. The fees charged for Yacktman during the period were
US$11,634,870 (31 March 2013: US$7,636,437) of which US$2,089,944 was outstanding at the period end (30
September 2013: US$2,100,113).
The Investment Manager has appointed Yacktman Asset Management LP (the “Sub-Investment Manager”) to act as
Sub-Investment Manager by the assignment, on 22 June 2012, of the sub-investment management agreement dated
11 November 2010. The Sub-Investment Manager provides discretionary investment management and marketing
services in relation to Yacktman subject to the overall supervision of the Investment Manager. The Sub-Investment
Manager is a US company and is registered with the Securities Exchange Commission (“SEC”). Fees of the SubInvestment Manager are paid by the Investment Manager.
Helicon
The Investment Manager is entitled to receive out of the assets of Helicon an annual fee of 1.00% in respect of Class
I US$ and Class D US$, of 0.75% in respect of Class S US$, and of 1.50% in respect of Class R US$, accrued daily
and payable monthly in arrears (before deduction of fees, expenses, borrowings and interest). The Investment
Manager is entitled to be reimbursed by Helicon for reasonable out of pocket expenses incurred by it. The fees
charged for Helicon during the period were US$176,598 (31 March 2013: US$33,953) of which US$41,902 was
outstanding at the period end (30 September 2013: US$32,939).
44
HEPTAGON FUND PLC
SEMI-ANNUAL REPORT AND UNAUDITED FINANCIAL STATEMENTS
For the half year ended 31 March 2014
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE HALF YEAR ENDED 31 MARCH 2014
2. Investment Management Fees (continued)
Helicon (continued)
The Investment Manager is also entitled to a performance related investment management fee (the “Performance
Fee”) payable in arrears in respect of each performance period.
The Investment Manager is entitled to receive out of the assets allocable to the relevant class of shares a
performance fee equal to a specified percentage, not greater than 15%, of the amount by which the performance of
Helicon exceeds the hurdle rate if the class of shares is above its high water mark. The initial performance period in
respect of each relevant class commences on the first business day after expiry of the initial offer period. The
performance periods of Helicon are each calendar quarter. The fees charged for Helicon during the period were
US$347,938 (31 March 2013: US$247,028) of which US$33,469 was outstanding at the period end (30 September
2013: US$394,394).
The Investment Manager has appointed Heptagon Capital LLP (the “Sub-Investment Manager”) to act as SubInvestment pursuant to a sub-investment management agreement dated 29 November 2013. The Sub-Investment
Manager provides discretionary investment management and marketing services in relation to Heptagon subject to
the overall supervision of the Investment Manager. The Sub-Investment Manager is an English limited liability
partnership authorised to conduct investment business in the United Kingdom by the Financial Conduct Authority.
Fees of the Sub-Investment Manager are paid by the Investment Manager.
Oppenheimer
The Investment Manager is entitled to receive out of the assets of Oppenheimer an annual fee of 1.50% in respect of
Class A US$ and Class A1 US$, of 1.95% in respect of Class B US$, of 0.90% in respect of Class C US$ and Class
CE EUR, and of 1.15% in respect of Class I US$, Class I1 US$, Class IE EUR, Class IF US$ and Class IG GBP,
accrued daily and payable monthly in arrears (before deduction of fees, expenses, borrowings and interest). The
Investment Manager will be entitled to be reimbursed by Oppenheimer for reasonable out of pocket expenses
incurred by it. The fees charged for Oppenheimer during the period were US$3,390,710 (31 March 2013:
US$691,325) of which US$589,469 was outstanding at the period end (30 September 2013: US$504,924).
The Investment Manager has appointed OFI Global Institutional Inc. (the “Sub-Investment Manager”) to act as SubInvestment Manager pursuant to an amended and restated sub-investment management agreement dated 29
November 2013. The Sub-Investment Manager provides discretionary investment management and marketing
services in relation to Oppenheimer subject to the overall supervision of the Investment Manager. The SubInvestment Manager is a US investment adviser and is registered with the SEC. Fees of the Sub-Investment
Manager are paid by the Investment Manager.
Kopernik
The Investment Manager is entitled to receive out of the assets of Kopernik an annual fee of 0.90% in respect of
Class C US$, Class CD US$ and Class CE EUR, and of 1.15% in respect of Class I US$, accrued daily and payable
monthly in arrears (before deduction of fees, expenses, borrowings and interest). The Investment Manager will be
entitled to be reimbursed by Kopernik for reasonable out of pocket expenses incurred by it. The fees charged for
Kopernik during the period were US$40,542 (31 March 2013: US$Nil) of which US$13,146 was outstanding at the
period end (30 September 2013: US$Nil).
The Investment Manager has appointed Kopernik Global Investors LLC (the “Sub-Investment Manager”) to act as
Sub-Investment Manager pursuant to a sub-investment management agreement dated 29 November 2013. The SubInvestment Manager provides discretionary investment management and marketing services in relation to Kopernik
subject to the overall supervision of the Investment Manager. The Sub-Investment Manager is a US investment
adviser and is registered with the SEC. Fees of the Sub-Investment Manager are paid by the Investment Manager.
45
HEPTAGON FUND PLC
SEMI-ANNUAL REPORT AND UNAUDITED FINANCIAL STATEMENTS
For the half year ended 31 March 2014
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE HALF YEAR ENDED 31 MARCH 2014
2. Investment Management Fees (continued)
Oppenheimer Global
The Investment Manager is entitled to receive out of the assets of Oppenheimer Global an annual fee of 0.90% in
respect of Class C US$, and Class CE EUR, accrued daily and payable monthly in arrears (before deduction of fees,
expenses, borrowings and interest). The Investment Manager will be entitled to be reimbursed by Oppenheimer
Global for reasonable out of pocket expenses incurred by it. The fees charged for Oppenheimer Global during the
period were US$163,734 (31 March 2013: US$Nil) of which US$106,571 was outstanding at the period end (30
September 2013: US$Nil).
The Investment Manager has appointed OFI Global Institutional Inc. (the “Sub-Investment Manager”) to act as SubInvestment Manager pursuant to an amended and restated sub-investment management agreement dated 29
November 2013. The Sub-Investment Manager provides discretionary investment management and marketing
services in relation to Oppenheimer Global subject to the overall supervision of the Investment Manager. The SubInvestment Manager is a US investment adviser and is registered with the SEC. Fees of the Sub-Investment
Manager are paid by the Investment Manager.
3. Administration Fees
Yacktman
The Administrator is entitled to receive 0.05% of the total net asset value of the Yacktman Sub-Fund. The
Administrator is also entitled to recover out of pocket expenses (plus VAT, thereon, if any) reasonably incurred on
behalf of the Sub-Fund out of the assets of the Sub-Fund on an actual cost basis.
The administration fee charged for the period amounted to US$506,521 (31 March 2013: US$343,099) of which
US$678,700 were outstanding at the period end (30 September 2013: US$402,969).
Helicon
The Administrator is entitled to receive 0.05% of the total net asset value of the Helicon Sub-Fund. The
Administrator is also entitled to recover out of pocket expenses (plus VAT, thereon, if any) reasonably incurred on
behalf of the Sub-Fund out of the assets of the Sub-Fund on an actual cost basis.
The administration fee charged for the period amounted to US$26,367 (31 March 2013: US$29,997) of which
US$28,682 were outstanding at the period end (30 September 2013: US$24,778).
Oppenheimer
The Administrator is entitled to receive 0.05% of the total net asset value of the Oppenheimer Sub-Fund. The
Administrator is also entitled to recover out of pocket expenses (plus VAT, thereon, if any) reasonably incurred on
behalf of the Sub-Fund out of the assets of the Sub-Fund on an actual cost basis.
The administration fee charged for the period amounted to US$204,488 (31 March 2013: US$49,257) of which
US$258,052 were outstanding at the period end (30 September 2013: US$119,655).
Kopernik
The Administrator is entitled to receive 0.05% of the total net asset value of the Kopernik Sub-Fund. The
Administrator is also entitled to recover out of pocket expenses (plus VAT, thereon, if any) reasonably incurred on
behalf of the Sub-Fund out of the assets of the Sub-Fund on an actual cost basis.
The administration fee charged for the period amounted to US$8,385 (31 March 2013: US$Nil) of which US$8,385
were outstanding at the period end (30 September 2013: US$Nil).
46
HEPTAGON FUND PLC
SEMI-ANNUAL REPORT AND UNAUDITED FINANCIAL STATEMENTS
For the half year ended 31 March 2014
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE HALF YEAR ENDED 31 MARCH 2014
3. Administration Fees (continued)
Oppenheimer Global
The Administrator is entitled to receive 0.05% of the total net asset value of the Oppenheimer Global Sub-Fund. The
Administrator is also entitled to recover out of pocket expenses (plus VAT, thereon, if any) reasonably incurred on
behalf of the Sub-Fund out of the assets of the Sub-Fund on an actual cost basis.
The administration fee charged for the period amounted to US$13,206 (31 March 2013: US$Nil) of which
US$13,206 were outstanding at the period end (30 September 2013: US$Nil).
4. Custodian Fees
Yacktman
The Custodian is entitled to receive an annual trustee fee of approximately 0.02% per annum of the net asset value
of the Sub-Fund, accrued at each valuation point and will be payable monthly in arrears. The Sub-Fund will also pay
custody fees ranging from 0.01% to 0.03% calculated by reference to the market value of the investments that the
Sub-Fund may make in each relevant market. The custodian fees are accrued at each valuation point, payable
monthly in arrears, and subject to a minimum charge of US$12,000 per annum. The Custodian is also entitled to
agreed upon transaction and cash service charges and to recover properly vouched out-of-pocket expenses out of the
assets of the Sub-Fund (plus VAT thereon, if any), including expenses of any sub-custodian appointed by it which
shall be at normal commercial rates.
The custodian fee charged for the period amounted to US$278,497 (31 March 2013: US$190,553) of which
US$375,374 (30 September 2013: US$225,514) was outstanding at the period end.
Helicon
The Custodian is entitled to receive an annual trustee fee of approximately 0.02% per annum of the net asset value
of the Sub-Fund, accrued at each valuation point and will be payable monthly in arrears. The Sub-Fund will also pay
custody fees ranging from 0.005% to 0.70% calculated by reference to the market value of the investments that the
Sub-Fund may make in each relevant market. The custodian fees are accrued at each valuation point, payable
monthly in arrears, and subject to a minimum charge of US$12,000 per annum. The Custodian is also entitled to
agreed upon transaction and cash service charges and to recover properly vouched out-of-pocket expenses out of the
assets of the Sub-Fund (plus VAT thereon, if any), including expenses of any sub-custodian appointed by it which
shall be at normal commercial rates.
The custodian fee charged for the period amounted to US$7,168 (31 March 2013: US$4,944) of which US$7,777
(30 September 2013: US$5,156) were outstanding at the period end.
Oppenheimer
The Custodian is entitled to receive an annual trustee fee of approximately 0.02% per annum of the net asset value
of the Sub-Fund, accrued at each valuation point and will be payable monthly in arrears. The Sub-Fund will also pay
custody fees ranging from 0.005% to 0.70% calculated by reference to the market value of the investments that the
Sub-Fund may make in each relevant market. The custodian fees are accrued at each valuation point, payable
monthly in arrears, and subject to a minimum charge of US$12,000 per annum. The Custodian is also entitled to
agreed upon transaction and cash service charges and to recover properly vouched out-of-pocket expenses out of the
assets of the Sub-Fund (plus VAT thereon, if any), including expenses of any sub-custodian appointed by it which
shall be at normal commercial rates.
The custodian fee charged for the period amounted to US$284,383 (31 March 2013: US$21,001) of which
US$335,534 (30 September 2013: US$133,475) were outstanding at the period end.
47
HEPTAGON FUND PLC
SEMI-ANNUAL REPORT AND UNAUDITED FINANCIAL STATEMENTS
For the half year ended 31 March 2014
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE HALF YEAR ENDED 31 MARCH 2014
4. Custodian Fees (continued)
Kopernik
The Custodian is entitled to receive an annual trustee fee of approximately 0.02% per annum of the net asset value
of the Sub-Fund, accrued at each valuation point and will be payable monthly in arrears. The Sub-Fund will also pay
custody fees ranging from 0.005% to 0.70% calculated by reference to the market value of the investments that the
Sub-Fund may make in each relevant market. The custodian fees are accrued at each valuation point, payable
monthly in arrears, and subject to a minimum charge of US$12,000 per annum. The Custodian is also entitled to
agreed upon transaction and cash service charges and to recover properly vouched out-of-pocket expenses out of the
assets of the Sub-Fund (plus VAT thereon, if any), including expenses of any sub-custodian appointed by it which
shall be at normal commercial rates.
The custodian fee charged for the period amounted to US$2,013 (31 March 2013: US$Nil) of which US$2,013 (30
September 2013: US$Nil) were outstanding at the period end.
Oppenheimer Global
The Custodian is entitled to receive an annual trustee fee of approximately 0.02% per annum of the net asset value
of the Sub-Fund, accrued at each valuation point and will be payable monthly in arrears. The Sub-Fund will also pay
custody fees ranging from 0.005% to 0.70% calculated by reference to the market value of the investments that the
Sub-Fund may make in each relevant market. The custodian fees are accrued at each valuation point, payable
monthly in arrears, and subject to a minimum charge of US$12,000 per annum. The Custodian is also entitled to
agreed upon transaction and cash service charges and to recover properly vouched out-of-pocket expenses out of the
assets of the Sub-Fund (plus VAT thereon, if any), including expenses of any sub-custodian appointed by it which
shall be at normal commercial rates.
The custodian fee charged for the period amounted to US$8,187 (31 March 2013: US$Nil) of which US$8,187 (30
September 2013: US$Nil) were outstanding at the period end.
5. Directors’ Fees
The Directors charge a fee for their services at a rate determined by the Directors and agreed with the Company. The
Directors have determined that the maximum fee per Director cannot exceed €30,000 per annum (excluding VAT, if
any). All Directors are entitled to reimbursement by the Company of expenses properly incurred in connection with
the business of the Company or the discharge of their duties. Robert Rosenberg has waived his entitlement to
Directors fees since his appointment.
Directors’ fees and expenses charged during the period were:
- Yacktman: US$7,810 (31 March 2013: US$7,253);
- Helicon: US$7,809 (31 March 2013: US$7,136);
- Oppenheimer: US$8,496 (31 March 2013: US$7,136);
- Kopernik: US$3,087 (31 March 2013: US$Nil);
- Oppenheimer Global: US$3,087 (31 March 2013: US$Nil).
Directors’ fees payable as at 31 March 2014 were:
- Yacktman: US$4,132 (30 September 2013: US$3,715);
- Helicon: US$4,128 (30 September 2013: US$3,713);
- Oppenheimer: US$3,718 (30 September 2013: US$2,788);
- Kopernik: US$3,087 (30 September 2013: US$Nil);
- Oppenheimer Global: US$3,087 (30 September 2013: US$Nil).
48
HEPTAGON FUND PLC
SEMI-ANNUAL REPORT AND UNAUDITED FINANCIAL STATEMENTS
For the half year ended 31 March 2014
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE HALF YEAR ENDED 31 MARCH 2014
6. Fair Value Hierarchy
IFRS 7 “Financial instruments – Disclosures” establishes a three-tier fair value hierarchy that prioritises the inputs to
valuation techniques to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in
active markets for identical assets or liabilities (Level 1 measurement) and lowest priority to unobservable inputs
(Level 3 measurement). Investments measured and reported at fair value are classified and disclosed in one of the
following fair value hierarchy levels based on the significance of the inputs used in measuring its fair value:
Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical,
unrestricted assets or liabilities;
Level 2: Quoted prices in markets that are not active or financial instruments for which all significant inputs are
observable, either directly or indirectly. Fair value is determined through the use of models or other valuation
methodologies;
Level 3: Prices or valuations that require inputs that are both significant to the fair value measurement and are
unobservable. Unobservable inputs are developed based on the best information available in the circumstances and
reflect the Company’s own assumptions about how market participants would be expected to value the asset or
liability.
An investment is always categorised as Level 1, 2 or 3 in its entirety. In certain cases, the fair value measurement for
an investment may use a number of different inputs that fall into different levels of the fair value hierarchy. In such
cases, an investment’s level within the fair value hierarchy is based on the lowest level of input that is significant to
the fair value measurement.
The Sub-Fund’s financial instruments are measured at fair value and it is usually possible to determine their fair
values within a reasonable range of estimates. Fair value estimates are made at a specific point in time, based on
market conditions and information about the financial instrument. These estimates are subjective in nature and
involve uncertainties that may require significant judgement (e.g., interest rates, volatility, estimated cash flows etc.)
Actual results could differ from these estimates.
The following table presents the financial instruments carried on the Statement of Financial Position by caption and
by level within the valuation hierarchy as at 31 March 2014.
Total
31-Mar-2014
US$
Level 1
31-Mar-2014
US$
Level 2
31-Mar-2014
US$
Level 3
31-Mar-2014
US$
Financial assets at fair value through profit or loss:
Equities
1,503,341,399
Short-term debt obligations
319,920,713
1,503,341,399
319,920,713
–
–
–
–
Total
1,823,262,112
1,823,262,112
–
–
Helicon
Total
31-Mar-2014
US$
Level 1
31-Mar-2014
US$
Level 2
31-Mar-2014
US$
Level 3
31-Mar-2014
US$
43,645,668
65,379
8,736
43,645,668
–
8,736
–
65,379
–
–
–
–
(434,557)
(221,901)
–
(221,901)
(434,557)
–
–
–
43,063,325
43,432,503
(369,178)
–
Yacktman
Financial assets at fair value through profit or loss:
Equities
Forward foreign currency contracts
Futures
Financial liabilities at fair value through profit or loss
Forward foreign currency contracts
Futures
Total
49
HEPTAGON FUND PLC
SEMI-ANNUAL REPORT AND UNAUDITED FINANCIAL STATEMENTS
For the half year ended 31 March 2014
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE HALF YEAR ENDED 31 MARCH 2014
6. Fair Value Hierarchy (continued)
Total
31-Mar-2014
US$
Level 1
31-Mar-2014
US$
Level 2
31-Mar-2014
US$
Level 3
31-Mar-2014
US$
Financial assets at fair value through profit or loss:
Equities
734,188,396
709,106,412
25,081,984
–
Total
734,188,396
709,106,412
25,081,984
–
Total
31-Mar-2014
US$
Level 1
31-Mar-2014
US$
Level 2
31-Mar-2014
US$
Level 3
31-Mar-2014
US$
Financial assets at fair value through profit or loss:
Equities
15,652,852
14,792,014
860,838
–
Total
15,652,852
14,792,014
860,838
–
Total
31-Mar-2014
US$
Level 1
31-Mar-2014
US$
Level 2
31-Mar-2014
US$
Level 3
31-Mar-2014
US$
Financial assets at fair value through profit or loss:
Equities
169,313,206
168,485,216
827,990
–
Total
169,313,206
168,485,216
827,990
–
Oppenheimer
Kopernik
Oppenheimer Global
The following table presents the financial instruments carried on the Statement of Financial Position by caption and
by level within the valuation hierarchy as at 30 September 2013. Total
30-Sep-2013
US$
Level 1
30-Sep-2013
US$
Level 2
30-Sep-2013
US$
Level 3
30-Sep-2013
US$
Financial assets at fair value through profit or loss:
Equities
1,389,022,736
Short-term debt obligations
352,951,363
1,389,022,736
352,951,363
–
–
–
–
Total
1,741,974,099
1,741,974,099
–
–
Total
30-Sep-2013
US$
Level 1
30-Sep-2013
US$
Level 2
30-Sep-2013
US$
Level 3
30-Sep-2013
US$
36,870,919
165,506
104,065
36,870,919
–
104,065
–
165,506
–
–
–
–
Financial liabilities at fair value through profit or loss:
Forward foreign currency contracts
(1,277,237)
Futures
(36,251)
–
(36,251)
(1,277,237)
–
–
–
36,938,733
(1,111,731)
–
Yacktman
Helicon
Financial assets at fair value through profit or loss:
Equities
Forward foreign currency contracts
Futures
Total
35,827,002
50
HEPTAGON FUND PLC
SEMI-ANNUAL REPORT AND UNAUDITED FINANCIAL STATEMENTS
For the half year ended 31 March 2014
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE HALF YEAR ENDED 31 MARCH 2014
6. Fair Value Hierarchy (continued)
Total
30-Sep-2013
US$
Level 1
30-Sep-2013
US$
Level 2
30-Sep-2013
US$
Level 3
30-Sep-2013
US$
Financial assets at fair value through profit or loss:
Equities
624,313,418
600,647,577
23,665,841
–
Total
624,313,418
600,647,577
23,665,841
–
Oppenheimer
There were no transfers within the Sub-Funds for the period ended 31 March 2014.
The following table presents the transfers between levels for securities held at 30 September 2013:
Oppenheimer
Level 1
US$
Level 2
US$
Level 3
US$
(13,763,442)
13,763,442
–
Transfers between Level 1 and 2:
Equities
The transfer from level 1 to level 2 was the result of one equity security. This transfer was due to the primary
exchange not being active on a daily basis. As a result the inputs used are those from an active secondary exchange.
There were no transfers within the Yacktman Fund or the Helicon Fund for the year ended 30 September 2013.
7. Derivatives
The following tables detail the derivatives held by the Company as at 31 March 2014:
Helicon
Forward foreign currency contracts
Description
Quantity
CAD/US$
(980,000)
GBP/US$
110,000
GBP/US$
(10,000)
GBP/US$
(210,000)
SEK/US$
650,000
SEK/US$
7,200,000
SEK/US$
(1,600,000)
SEK/US$
(600,000)
ZAR/US$
400,000
ZAR/US$
9,870,000
Unrealised gain on forward foreign currency contracts
Maturity
date
15/04/2014
15/04/2014
15/04/2014
15/04/2014
15/04/2014
15/04/2014
15/04/2014
15/04/2014
15/04/2014
15/04/2014
Counterparty
Brown Brothers Harriman
Brown Brothers Harriman
Brown Brothers Harriman
Brown Brothers Harriman
Brown Brothers Harriman
Brown Brothers Harriman
Brown Brothers Harriman
Brown Brothers Harriman
Brown Brothers Harriman
Brown Brothers Harriman
Unrealised gain
US$
12,560
2,381
60
883
1,086
9,288
695
419
2,354
35,653
65,379
51
HEPTAGON FUND PLC
SEMI-ANNUAL REPORT AND UNAUDITED FINANCIAL STATEMENTS
For the half year ended 31 March 2014
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE HALF YEAR ENDED 31 MARCH 2014
7. Derivatives (continued)
Helicon (continued)
Futures contracts*
Description
FTSE 100 INDEX 0614
Unrealised gain on futures contracts
Number of
contracts
(38)
Maturity
date
20/06/2014
Counterparty
Morgan Stanley
Total financial derivative assets at fair value through profit or loss
Unrealised gain
US$
8,736
8,736
74,115
* The clearing broker for the futures contracts is Morgan Stanley. For cash pledged as collateral see the Statement of
Financial Position.
Forward foreign currency contracts
Description
Quantity
CAD/US$
(70,000)
CAD/US$
(100,000)
€/US$
(9,025,000)
€/US$
(385,000)
€/US$
(590,000)
€/US$
(640,000)
€/US$
(320,000)
€/US$
(330,000)
€/US$
(180,000)
GBP/US$
(5,740,000)
GBP/US$
(400,000)
GBP/US$
(380,000)
GBP/US$
(50,000)
JPY/US$
32,000,000
JPY/US$
(352,000,000)
SEK/US$
(18,150,000)
SEK/US$
(500,000)
ZAR/US$
(10,270,000)
Unrealised loss on forward foreign currency contracts
Maturity
date
15/04/2014
15/04/2014
15/04/2014
15/04/2014
15/04/2014
15/04/2014
15/04/2014
15/04/2014
15/04/2014
15/04/2014
15/04/2014
15/04/2014
15/04/2014
15/04/2014
15/04/2014
15/04/2014
15/04/2014
15/04/2014
Counterparty
Brown Brothers Harriman
Brown Brothers Harriman
Brown Brothers Harriman
Brown Brothers Harriman
Brown Brothers Harriman
Brown Brothers Harriman
Brown Brothers Harriman
Brown Brothers Harriman
Brown Brothers Harriman
Brown Brothers Harriman
Brown Brothers Harriman
Brown Brothers Harriman
Brown Brothers Harriman
Brown Brothers Harriman
Brown Brothers Harriman
Brown Brothers Harriman
Brown Brothers Harriman
Brown Brothers Harriman
Unrealised loss
US$
(378)
(200)
(122,681)
(10,085)
(15,732)
(8,418)
(2,830)
(3,994)
(400)
(175,392)
(15,982)
(8,951)
(216)
(5,318)
(9,679)
(15,412)
(654)
(38,235)
(434,557)
52
HEPTAGON FUND PLC
SEMI-ANNUAL REPORT AND UNAUDITED FINANCIAL STATEMENTS
For the half year ended 31 March 2014
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE HALF YEAR ENDED 31 MARCH 2014
7. Derivatives (continued)
Helicon (continued)
Futures contracts*
Description
EUR STOXX 50 0614
S&P 500 0614
TOPIX INDEX 0614
Unrealised loss on futures contracts
Number of
contracts
(142)
(61)
110
Maturity
date
20/06/2014
20/06/2014
12/06/2014
Counterparty
Morgan Stanley
Morgan Stanley
Morgan Stanley
Total financial derivative liabilities at fair value through profit or loss
Unrealised loss
US$
(180,950)
(14,568)
(26,383)
(221,901)
656,458
* The clearing broker for the futures contracts is Morgan Stanley. For cash pledged as collateral see the Statement of
Financial Position.
The following tables detail the derivatives held by the Company as at 30 September 2013:
Helicon
Forward foreign currency contracts
Description
Quantity
€/US$
300,000
€/US$
1,280,000
US$/€
(1,520,000)
GBP/US$
1,000,000
GBP/US$
330,000
SEK/US$
3,250,000
US$/SEK
(2,100,000)
US$/ZAR
(1,650,000)
CHF/US$
930,000
CHF/US$
11,600
CHF/US$
11,000
Unrealised gain on forward foreign currency contracts
Maturity
date
15/10/2013
15/10/2013
15/10/2013
15/10/2013
15/10/2013
15/10/2013
15/10/2013
15/10/2013
15/10/2013
15/10/2013
15/10/2013
Counterparty
Brown Brothers Harriman
Brown Brothers Harriman
Brown Brothers Harriman
Brown Brothers Harriman
Brown Brothers Harriman
Brown Brothers Harriman
Brown Brothers Harriman
Brown Brothers Harriman
Brown Brothers Harriman
Brown Brothers Harriman
Brown Brothers Harriman
Unrealised gain
US$
9,181
36,560
208
48,323
10,449
7,904
342
1,297
50,869
364
9
165,506
Futures contracts*
Description
TOPIX INDEX 1213
FTSE 100 INDEX 1213
S&P 500 1213
Unrealised gain on futures contracts
Number of
contracts
80
(51)
(62)
Maturity
date
12/12/2013
20/12/2013
20/12/2013
Total financial derivative assets at fair value through profit or loss
Counterparty
Morgan Stanley
Morgan Stanley
Morgan Stanley
Unrealised gain
US$
17,470
71,755
14,840
104,065
269,571
* The clearing broker for the futures contracts is Morgan Stanley. For cash pledged as collateral see the Statement of
Financial Position.
53
HEPTAGON FUND PLC
SEMI-ANNUAL REPORT AND UNAUDITED FINANCIAL STATEMENTS
For the half year ended 31 March 2014
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE HALF YEAR ENDED 31 MARCH 2014
7. Derivatives (continued)
Helicon (continued)
Forward foreign currency contracts
Description
Quantity
US$/€
(6,290,000)
US$/€
(185,000)
US$/€
(250,000)
US$/€
(275,000)
US$/€
(580,000)
US$/GBP
(6,710,000)
US$/GBP
(270,000)
US$/GBP
(940,000)
US$/JPY
(123,000,000)
US$/JPY
(18,000,000)
US$/JPY
(36,000,000)
US$/SEK
(15,350,000)
US$/ZAR
(6,800,000)
US$/ZAR
(2,400,000)
US$/CAD
(1,100,000)
US$/CAD
(210,000)
US$/CAD
(350,000)
US$/CHF
(294,600)
US$/CHF
(13,000)
Unrealised loss on forward foreign currency contracts
Maturity
date
15/10/2013
15/10/2013
15/10/2013
15/10/2013
15/10/2013
15/10/2013
15/10/2013
15/10/2013
15/10/2013
15/10/2013
15/10/2013
15/10/2013
15/10/2013
15/10/2013
15/10/2013
15/10/2013
15/10/2013
15/10/2013
15/10/2013
Counterparty
Brown Brothers Harriman
Brown Brothers Harriman
Brown Brothers Harriman
Brown Brothers Harriman
Brown Brothers Harriman
Brown Brothers Harriman
Brown Brothers Harriman
Brown Brothers Harriman
Brown Brothers Harriman
Brown Brothers Harriman
Brown Brothers Harriman
Brown Brothers Harriman
Brown Brothers Harriman
Brown Brothers Harriman
Brown Brothers Harriman
Brown Brothers Harriman
Brown Brothers Harriman
Brown Brothers Harriman
Brown Brothers Harriman
Unrealised loss
US$
(325,903)
(4,960)
(4,183)
(7,412)
(13,626)
(754,092)
(22,954)
(5,559)
(12,402)
(2,364)
(701)
(101,712)
(1,316)
(340)
(7,221)
(1,904)
(1,078)
(9,088)
(422)
(1,277,237)
Futures contracts*
Description
EUR STOXX 50 1213
Unrealised loss on futures contracts
Number of
contracts
(133)
Maturity
date
20/12/2013
Total financial derivative liabilities at fair value through profit or loss
Counterparty
Morgan Stanley
Unrealised loss
US$
(36,251)
(36,251)
(1,313,488)
* The clearing broker for the futures contracts is Morgan Stanley. For cash pledged as collateral see the Statement of
Financial Position.
54
HEPTAGON FUND PLC
SEMI-ANNUAL REPORT AND UNAUDITED FINANCIAL STATEMENTS
For the half year ended 31 March 2014
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE HALF YEAR ENDED 31 MARCH 2014
8. Exchange rates
The exchange rates in use as at 31 March 2014 and 30 September 2013 are as follows:
US$/AUD
US$/BRL
US$/CAD
US$/CHF
US$/CLP
US$/COP
US$/DKK
US$/€
US$/EGP
US$/GBP
US$/HKD
US$/IDR
US$/INR
US$/JPY
US$/KRW
US$/MXN
US$/MYR
US$/NGN
US$/NOK
US$/PHP
US$/PLN
US$/RUB
US$/SEK
US$/SGD
US$/THB
US$/TRY
US$/TWD
US$/ZAR
31-Mar-2014
30-Sep-2013
0.9268
0.4432
0.9060
1.1321
0.0018
0.0005
0.1846
1.3782
0.1435
1.6671
0.1289
0.0001
0.0167
0.0097
0.0009
0.0766
0.3062
0.0061
0.1665
0.0223
0.3310
0.0280
0.1542
0.7952
0.0308
0.4675
0.0328
0.0951
0.9317
0.4492
0.9729
1.1059
0.0020
0.0005
0.1815
1.3536
0.1451
1.6194
0.1289
0.0001
0.0160
0.0102
0.0009
0.0760
0.3068
0.0062
0.1668
0.0230
0.3201
0.0309
0.1557
0.7970
0.0320
0.4944
0.0338
0.0994
9. Related parties
Parties are considered to be related if one party has the ability to control the other party or exercise significant
influence over the party in making financial or operational decisions. Mr Robert Rosenberg a Director of the
Company, is the Chief Operating Officer of Heptagon Capital LLP, the Investment Manager. Mr Fionán Breathnach,
a Director of the Company, is also a partner within Mason Hayes & Curran who are the legal advisors to the
Company. Fees paid to Directors have been disclosed in note 7 to these Financial Statements. Legal fees paid to
Mason Hayes & Curran for the year ended 30 September 2013 were US$151,780 (31 September 2013:
US$309,875).
55
HEPTAGON FUND PLC
SEMI-ANNUAL REPORT AND UNAUDITED FINANCIAL STATEMENTS
For the half year ended 31 March 2014
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE HALF YEAR ENDED 31 MARCH 2014
9. Related parties (continued)
Members of the Investment Manager had the following interests in the Company’s shares as at 31 March 2014:
Yacktman
Investment Manager Member
Eran Ben-Zour
Alex Gunz
Thomas Hoersman
Class Invested In
Class I
Class C
Class C
No. of shares
1,534
427
818
Class Invested In
Class D
Class D
Class D
Class D
Class D
Class D
No. of shares
1,252
418
824
1,252
270
657
Class Invested In
Class IG
Class C
No. of shares
161
2,500
Class Invested In
Class C
No. of shares
467
Class Invested In
Class C
No. of shares
988
Helicon
Investment Manager Member
Eran Ben-Zour
Alex Gunz
Tarek Mooro
Fredrik Plyhr
Arnaud Gandon
Thomas Hoersman
Oppenheimer
Investment Manager Member
Alex Gunz
Eran Ben-Zour
Kopernik
Investment Manager Member
Thomas Hoersman
Oppenheimer Global
Investment Manager Member
Eran Ben-Zour
Members of the Investment Manager had the following interests in the Company’s shares as at 30 September 2013:
Yacktman
Investment Manager Member
Eran Ben-Zour
Alex Gunz
Thomas Hoersman
Class Invested In
Class I
Class C
Class C
No. of shares
1,534
427
283
Class Invested In
Class D
Class D
Class D
Class D
Class D
Class D
No. of shares
1,252
418
824
1,252
270
657
Helicon
Investment Manager Member
Eran Ben-Zour
Alex Gunz
Tarek Mooro
Fredrik Plyhr
Arnaud Gandon
Thomas Hoersman
56
HEPTAGON FUND PLC
SEMI-ANNUAL REPORT AND UNAUDITED FINANCIAL STATEMENTS
For the half year ended 31 March 2014
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE HALF YEAR ENDED 31 MARCH 2014
9. Related parties (continued)
Oppenheimer
Investment Manager Member
Eran Ben-Zour
Class Invested In
Class C
No. of shares
2,500
Heptagon Capital Limited had the following interest in the Company’s shares as at 31 March 2014:
Yacktman
Class Invested In
Class C
Class I
No. of shares
350
1,935
Helicon
Class Invested In
Class D
No. of shares
202,972
Oppenheimer
Class Invested In
Class C
No. of shares
2,141
Kopernik
Class Invested In
Class C
Class CD
No. of shares
24,437
31,400
Heptagon Capital LLP had the following interest in the Company’s shares as at 30 September 2013:
Yacktman
Class Invested In
Class C
Class I
No. of shares
34,858
53,192
Helicon
Class Invested In
Class D
Class S
No. of shares
200,395
13,488
Oppenheimer
Class Invested In
Class C
No. of shares
6,837
57
HEPTAGON FUND PLC
SEMI-ANNUAL REPORT AND UNAUDITED FINANCIAL STATEMENTS
For the half year ended 31 March 2014
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE HALF YEAR ENDED 31 MARCH 2014
10. Soft commissions
During the period/year ended 31 March 2014 and 30 September 2013, the Investment Manager and the SubInvestment Manager entered into soft commission arrangements with brokers in respect of which certain goods and
services used to support the investment decision process were received. The Investment Manager, the SubInvestment Managers and their respective connected persons do not make direct payments for these services but do
transact business with the brokers on behalf of the Sub-Funds, and commissions are paid on these transactions.
Under these agreements, each broker has agreed to provide best execution. These services assist the Investment
Manager and the Sub-Investment Managers in carrying out their investment decision-making responsibilities in
respect of the relevant Sub-Funds.
During the period/year ended 31 March 2014 and 30 September 2013, OFI Global Institutional Inc (“OFI”) did not
participate in any soft commission arrangements for the Sub-Funds to which OFI act as Sub-Investment Manager.
11. Cross liability
The Company is structured as an umbrella fund with segregated liability between the Sub-Funds.
Each Sub-Fund therefore will be treated as bearing its own liabilities and the Company will not be liable as a whole
to third parties provided, however, if the Directors are of the opinion that a particular liability does not relate to any
particular Sub-Fund or Sub-Funds, that liability will be borne jointly by all Sub-Funds pro rata to their respective net
asset values at the time when the allocation is made.
Certain jurisdictions, however, other than Ireland, might not recognise such limited right of recourse inherent in the
Company’s segregated structure. In such a case, creditors of a particular Sub-Fund could have recourse to assets of
other Sub-Funds within the Company at the date of the authorisation of the Financial Statements. The Directors are
not aware of any such existing or contingent liability.
12. Post period end events
The Company is due to launch two new Sub-Funds, the Oppenheimer Developing Markets Equity SRI Fund and
Harvest China A Shares Equity Fund, in the second quarter of 2014.
There were no other post period end events that would impact these Financial Statements.
13. Approval of the Financial Statements
The Board of Directors approved the Financial Statements on 22 May 2014.
58
HEPTAGON FUND PLC
SEMI-ANNUAL REPORT AND UNAUDITED FINANCIAL STATEMENTS
For the half year ended 31 March 2014
SIGNIFICANT PORTFOLIO MOVEMENTS
FOR THE HALF YEAR ENDED 31 MARCH 2014 (UNAUDITED)
Yacktman
Significant purchases during the period:
Quantity
United States Treasury Bill ZCP 18/09/2014
United States Treasury Bill ZCP 11/12/2014
Samsung Electronics Co Ltd Class Preference
Cisco Systems Inc.
PepsiCo Inc
eBay Inc
Procter & Gamble Co
Aggreko Plc
Coca-Cola Co
Oracle Corp
Avon Products Inc
Twenty-First Century Fox Inc Class A
Microsoft Corp
Twenty-First Century Fox Inc Class B
Sysco Corp
Stryker Corp
Johnson & Johnson
Exxon Mobil Corp
US Bancorp
Viacom Inc
170,000,000
47,000,000
30,850
982,000
250,000
365,000
215,000
535,400
305,000
295,000
480,100
210,000
170,000
170,000
130,000
50,000
40,000
30,000
65,000
30,000
Cost
US$
169,888,013
46,493,130
28,467,592
21,314,367
20,505,003
18,357,576
17,390,998
14,083,325
11,874,889
10,186,741
7,536,364
6,992,059
6,254,977
5,361,589
4,447,288
3,738,624
3,678,634
2,814,988
2,522,228
2,391,962
59
HEPTAGON FUND PLC
SEMI-ANNUAL REPORT AND UNAUDITED FINANCIAL STATEMENTS
For the half year ended 31 March 2014
SIGNIFICANT PORTFOLIO MOVEMENTS
FOR THE HALF YEAR ENDED 31 MARCH 2014 (UNAUDITED) (CONTINUED)
Yacktman (continued)
Significant sales during the period:
Quantity
United States Treasury Bill ZCP 06/03/2014
Twenty-First Century Fox Inc Class A
CR Bard Inc
News Corp
Procter & Gamble Co
Coca-Cola Co
Sysco Corp
Microsoft Corp
Cisco Systems Inc
PepsiCo Inc
Apollo Education Group Inc Class A
Stryker Corp
Johnson & Johnson
Corning Inc
Janus Capital Group Inc
Oracle Corp
Viacom Inc
Exxon Mobil Corp
US Bancorp
Blackberry Ltd
Clorox Co
eBay Inc
ConocoPhillips
30,000,000
883,000
110,100
771,500
160,000
265,000
269,000
250,000
355,000
95,000
230,000
80,000
65,000
310,000
575,000
140,000
60,000
45,000
95,000
370,000
35,000
45,000
35,000
Proceeds
US$
29,999,213
29,845,447
15,069,617
13,473,362
12,608,273
10,356,299
9,827,524
9,141,026
7,938,265
7,719,713
7,413,684
6,176,089
5,920,084
5,905,069
5,853,065
5,226,606
5,074,848
4,162,996
3,835,930
3,111,244
3,068,999
2,506,538
2,362,549
60
HEPTAGON FUND PLC
SEMI-ANNUAL REPORT AND UNAUDITED FINANCIAL STATEMENTS
For the half year ended 31 March 2014
SIGNIFICANT PORTFOLIO MOVEMENTS
FOR THE HALF YEAR ENDED 31 MARCH 2014 (UNAUDITED) (CONTINUED)
Helicon
Significant purchases during the period:
Quantity
Cie de St-Gobain
Valeo SA
Western Digital Corp
Lawson Inc
Bodycote Plc
Anritsu Corp
Bilfinger SE
Jungheinrich AG
DMG Mori Seiki AG
Duerr AG
CA Inc
Kansas City Southern
Kingspan Group Plc
Linde AG
WH Smith Plc
Kerry Group Plc Class A
Svenska Cellulosa AB SCA Class B
CF Industries Holdings Inc
Telecity Group Plc
Aggreko Plc
Electrolux AB
Leggett & Platt Inc
Booker Group Plc
Stericycle Inc
Mondi Plc
DR Horton Inc
Isuzu Motors Ltd
Pace Plc
34,000
16,600
13,450
14,000
91,300
95,000
8,600
13,500
25,500
9,900
23,100
6,650
36,400
3,000
33,300
8,300
19,700
2,400
46,500
19,200
20,300
15,900
151,000
3,150
22,800
12,100
42,000
35,700
Cost
US$
1,785,431
1,712,093
1,094,793
1,045,433
1,030,303
1,028,193
992,295
991,990
818,227
817,268
749,094
716,736
651,495
584,068
579,161
560,409
559,716
539,233
528,764
495,830
486,476
474,014
382,096
368,267
358,769
275,860
262,155
211,401
61
HEPTAGON FUND PLC
SEMI-ANNUAL REPORT AND UNAUDITED FINANCIAL STATEMENTS
For the half year ended 31 March 2014
SIGNIFICANT PORTFOLIO MOVEMENTS
FOR THE HALF YEAR ENDED 31 MARCH 2014 (UNAUDITED) (CONTINUED)
Helicon (continued)
Significant sales during the period:
Quantity
Draegerwerk AG & Co KGaA
Tupperware Brands Corp
Electrolux AB
Life Healthcare Group Holdings Ltd.
Pace Plc
Bodycote Plc
DMG Mori Seiki AG
Wolseley Plc
Kansas City Southern
Linde AG
Bilfinger SE
Kerry Group Plc Class A
Parkland Fuel Corp
Telecity Group Plc
Aggreko Plc
Duerr AG
Valeo SA
Isuzu Motors Ltd
CF Industries Holdings Inc
Cie de St-Gobain
Booker Group Plc
WH Smith Plc
Stericycle Inc
Kingspan Group Plc
Mondi Plc
Leggett & Platt Inc
12,050
13,450
53,900
323,000
194,000
83,400
28,900
16,250
7,300
3,800
6,350
9,900
40,000
58,000
23,700
6,700
4,500
79,000
2,000
8,500
174,000
28,000
4,100
19,500
14,000
6,200
Proceeds
US$
1,423,562
1,247,144
1,234,704
1,129,046
1,078,415
919,646
861,654
820,121
753,501
748,368
738,617
708,586
678,901
667,155
598,325
550,750
525,767
486,195
482,795
473,413
464,369
461,338
458,790
351,085
244,722
199,380
62
HEPTAGON FUND PLC
SEMI-ANNUAL REPORT AND UNAUDITED FINANCIAL STATEMENTS
For the half year ended 31 March 2014
SIGNIFICANT PORTFOLIO MOVEMENTS
FOR THE HALF YEAR ENDED 31 MARCH 2014 (UNAUDITED) (CONTINUED)
Oppenheimer
Significant purchases during the period:
Quantity
Prada SpA
Yandex NV Class A
Petroleo Brasileiro SA Class A
NovaTek OAO GDR
Pernod Ricard SA
Baidu Inc
Telefonica Brasil SA ADR
Glencore Xstrata Plc
Magnit OJSC
Old Mutual PLC
LVMH Moet Hennessy Louis Vuitton SA
BM&FBovespa SA
Tullow Oil Plc
Taiwan Semiconductor Manufacturing Co Ltd
CNOOC Ltd
Alrosa AO
MercadoLibre Inc
Astra International Tbk PT
Cencosud SA
Carlsberg Class B
Housing Development Finance Corp
Hang Lung Properties Ltd
Infosys Ltd
Mindray Medical International Ltd
Natura Cosmeticos SA
Fomento Economico Mexicano SAB de CV
SABMiller Plc
Tencent Holdings Ltd
Turkiye Garanti Bankasi AS
Naspers Ltd Class N
Cie Financiere Richemont SA
Diageo Plc
Jardine Strategic Holdings Ltd
America Movil SAB de CV
ICICI Bank Ltd
Lojas Americanas SA
Haci Omer Sabanci Holding AS
Tingyi Cayman Islands Holding Corp
Grupo Financiero Banorte SAB de CV Class O
1,043,000
247,460
604,300
55,000
57,090
39,700
325,150
1,075,810
22,663
1,685,287
26,430
1,104,700
347,560
1,207,000
2,248,000
3,507,282
38,060
6,153,500
1,050,100
32,092
245,964
1,038,000
56,234
86,980
186,500
309,934
59,230
41,600
893,088
22,051
25,244
80,300
74,000
111,390
61,000
351,300
560,112
790,000
344,888
Cost
US$
8,696,848
8,358,446
7,447,285
6,843,834
6,626,006
6,450,065
6,159,327
5,593,828
5,164,006
5,157,517
4,956,486
4,854,276
4,690,549
4,280,440
3,947,774
3,837,064
3,807,790
3,535,426
3,342,534
3,264,090
3,181,371
3,144,543
3,099,184
3,060,566
2,956,927
2,854,434
2,752,134
2,699,528
2,669,488
2,633,080
2,486,573
2,451,458
2,422,008
2,326,346
2,289,624
2,234,060
2,232,912
2,175,722
2,158,985
63
HEPTAGON FUND PLC
SEMI-ANNUAL REPORT AND UNAUDITED FINANCIAL STATEMENTS
For the half year ended 31 March 2014
SIGNIFICANT PORTFOLIO MOVEMENTS
FOR THE HALF YEAR ENDED 31 MARCH 2014 (UNAUDITED) (CONTINUED)
Oppenheimer (continued)
Significant sales during the period:
Quantity
NAVER Corp
Tencent Holdings Ltd
Unilever Plc
Baidu Inc
Heineken NV
Anglo American Plc
HDFC Bank Ltd
BG Group Plc
Ctrip.com International Ltd
Saipem SpA
United Spirits Ltd
NetEase Inc
MRV Engenharia e Participacoes SA
Sun Pharmaceutical Industries Ltd
America Movil SAB de CV
CapitaMalls Asia Ltd
Salvatore Ferragamo SpA
SABMiller Plc
Yandex NV Class A
MercadoLibre Inc
Shoprite Holdings Ltd
Hindustan Unilever Ltd
Cementos Argos SA
Zee Entertainment Enterprises Ltd
17,915
137,800
194,649
45,700
106,340
299,951
158,840
338,980
95,440
145,482
73,413
33,730
628,800
239,938
116,310
1,301,000
51,738
33,630
38,160
11,030
91,469
144,676
245,074
283,792
Proceeds
US$
10,840,825
9,392,546
7,865,160
7,686,785
6,807,501
6,620,130
6,094,935
5,737,198
5,075,465
3,262,128
2,940,385
2,406,976
2,331,152
2,322,724
2,274,024
1,791,179
1,762,594
1,697,655
1,499,797
1,490,590
1,448,186
1,404,290
1,255,651
1,215,637
64
HEPTAGON FUND PLC
SEMI-ANNUAL REPORT AND UNAUDITED FINANCIAL STATEMENTS
For the half year ended 31 March 2014
SIGNIFICANT PORTFOLIO MOVEMENTS
FOR THE HALF YEAR ENDED 31 MARCH 2014 (UNAUDITED) (CONTINUED)
Kopernik
Significant purchases during the period:
Quantity
Gazprom OAO
Uranium Participation Corp
Newmont Mining Corp
Cameco Corp
Peabody Energy Corp
Newcrest Mining Ltd
RusHydro JSC
Japan Steel Works Ltd
Centrais Eletricas Brasileiras SA Class B
Barrick Gold Corp
Federal Grid Co Unified Energy System JSC GDR
ERG SpA
SkyWest Inc
Turquoise Hill Resources Ltd
China Yurun Food Group Ltd
Kinross Gold Corp
KT Corp
Sberbank of Russia
Polyus Gold International
China Mobile Ltd
Arch Coal Inc
Centerra Gold Inc
Electricite de France
Moscow Exchange MICEX-RTS OAO
Gabriel Resources Ltd
Golden Agri-Resources Ltd
Niko Resources Ltd
Novagold Resources Inc
Korea Elec Power Corp
West Japan Railway Co
Tsakos Energy Navigation Ltd
Anglogold Ashanti
MHP SA
UPM-Kymmene OYJ
Northern Dynasty Minerals Ltd
Telecom Italia SpA
Dundee Precious Metals Inc
Federal Grid Co Unified Energy System JSC
Layne Christensen Co
101,847
154,517
30,400
33,015
38,899
89,946
396,238
127,000
145,978
29,692
395,727
36,192
33,376
119,902
614,000
86,946
27,667
34,039
104,833
32,000
75,400
80,552
8,360
163,593
259,489
614,000
148,299
107,883
15,913
5,700
43,302
19,876
16,223
14,266
167,718
289,659
73,721
93,614,703
11,845
Cost
US$
820,905
789,575
730,707
695,360
684,002
644,032
643,123
639,865
620,205
511,213
498,308
478,624
458,723
398,777
394,359
393,075
391,494
360,070
334,192
316,465
314,070
306,676
291,134
283,054
273,841
263,557
261,675
259,419
251,567
242,656
241,045
237,977
232,391
231,139
223,343
222,356
199,338
196,314
186,329
65
HEPTAGON FUND PLC
SEMI-ANNUAL REPORT AND UNAUDITED FINANCIAL STATEMENTS
For the half year ended 31 March 2014
SIGNIFICANT PORTFOLIO MOVEMENTS
FOR THE HALF YEAR ENDED 31 MARCH 2014 (UNAUDITED) (CONTINUED)
Kopernik (continued)
Significant sales during the period:
Quantity
Anglogold Ashanti
Polyus Gold International
Arch Coal Inc
ERG SpA
Korea Elec Power Corp
Newcrest Mining Ltd
Cameco Corp
Uranium Participation Corp
Dundee Precious Metals Inc
United Laboratories International Holdings Ltd
Niko Resources Ltd
Quimica Y Minera
Centrais Eletricas Brasileiras SA Class B
Electricite de France
Golden Agri-Resources Ltd
Solidere
Centerra Gold Inc
Areva SA
Novagold Resources Inc
Moscow Exchange MICEX-RTS OAO
Silver Standard Resources Inc
Tsakos Energy Navigation Ltd
Detour Gold Corp
19,876
104,833
75,400
19,485
15,913
22,114
9,334
41,832
39,017
254,000
46,194
3,131
21,715
1,801
149,000
4,658
15,218
1,716
13,341
24,266
4,311
7,444
5,180
Proceeds
US$
355,783
324,469
313,855
280,897
275,945
231,772
226,765
219,635
204,154
146,726
122,699
95,683
94,734
70,477
67,579
60,818
56,678
49,571
47,613
45,057
44,769
42,366
36,397
66
HEPTAGON FUND PLC
SEMI-ANNUAL REPORT AND UNAUDITED FINANCIAL STATEMENTS
For the half year ended 31 March 2014
SIGNIFICANT PORTFOLIO MOVEMENTS
FOR THE HALF YEAR ENDED 31 MARCH 2014 (UNAUDITED) (CONTINUED)
Oppenheimer Global
Significant purchases during the period:
Quantity
Citigroup Inc
Twenty-First Century Fox Inc Class A
Blinkx Plc
Viacom Inc Class B
Credit Suisse Group AG
Baidu Inc
Swedish Match AB
Assured Guaranty Ltd
Christian Dior SA
Yandex NV Class A
Google Inc Class A
Liberty Global Plc Class A
eBay Inc
AMC Networks Inc
UBS AG
Madison Square Garden Co Class A
Telephone & Data Systems Inc
Bank of America Corp
Scripps Networks Interactive Inc Class A
Millicom International Cellular SA
Syngenta AG
Liberty Interactive Corp Class A
Rakuten Inc
National Fuel Gas Co
Pernod Ricard SA
Wirecard AG
Ascent Capital Group Inc Class A
Investment AB Kinnevik Class B
Lululemon Athletica Inc
Monsanto Co
BNP Paribas SA
Grupo Televisa SAB
Deutsche Bank AG
Chr Hansen Holding A/S
KWS Saat AG
Global Mediacom Tbk PT
Sistema JSFC
CDON Group AB
151,365
220,922
3,428,707
74,538
201,177
32,418
169,853
210,038
26,213
151,278
3,816
80,173
78,616
61,464
204,278
71,246
165,160
229,102
48,660
36,544
10,065
122,023
235,000
41,554
27,180
69,473
41,489
80,790
60,740
26,812
37,182
89,414
55,249
63,386
6,757
12,983,000
99,993
547,457
Cost
US$
7,433,752
7,195,502
6,530,802
6,397,279
6,291,869
5,384,920
5,357,487
5,090,328
4,992,937
4,963,321
4,514,735
4,472,087
4,397,449
4,336,399
4,224,747
4,160,467
4,111,774
3,854,368
3,840,889
3,739,582
3,701,115
3,506,754
3,418,783
3,109,693
3,103,312
3,085,638
3,071,805
3,034,972
3,014,158
3,007,536
2,971,717
2,677,723
2,595,595
2,538,523
2,389,722
2,376,139
2,323,600
2,299,569
67
HEPTAGON FUND PLC
SEMI-ANNUAL REPORT AND UNAUDITED FINANCIAL STATEMENTS
For the half year ended 31 March 2014
SIGNIFICANT PORTFOLIO MOVEMENTS
FOR THE HALF YEAR ENDED 31 MARCH 2014 (UNAUDITED) (CONTINUED)
Oppenheimer Global (continued)
Significant purchases during the period (continued):
Quantity
LVMH Moet Hennessy Louis Vuitton SA
SoftBank Corp
KDDI Corp
MBIA Inc
Navistar International Corp
Zon Optimus SGPS SA
Guidance Software Inc
Prada SpA
12,570
28,600
37,400
158,973
59,617
274,789
192,074
260,500
Cost
US$
2,282,631
2,224,789
2,121,925
2,111,256
2,104,920
2,069,660
2,044,200
1,974,148
Significant sales during the period:
Quantity
Viacom Inc Class B
Liberty Global Plc Class A
Loccitane International
Fuchs Petrolub SE
Swedish Match AB
Jazztel Plc
ICICI Bank Ltd
Global Mediacom Tbk PT
Tower Bersama Infrastrucure
Millicom International Cellular SA
Telephone & Data Systems Inc
Assured Guaranty Ltd
Credit Suisse Group AG
Citigroup Inc
Diageo Plc
Investment AB Kinnevik Class B
Christian Dior
AMC Networks Inc
Twenty-First Century Fox Inc Class A
eBay Inc
UBS AG
Scripps Networks Interactive Inc Class A
21,930
27,823
493,000
10,900
34,131
69,568
24,901
4,670,500
1,692,500
8,735
34,420
29,300
11,351
5,880
9,146
6,611
1,390
3,500
7,580
4,230
11,068
2,750
Proceeds
US$
1,869,494
1,171,268
1,105,819
1,085,800
1,079,745
1,033,221
1,001,773
978,251
891,603
880,587
866,051
734,131
360,288
279,967
263,568
262,207
262,081
246,623
242,135
233,233
223,809
208,116
68
HEPTAGON FUND PLC
SEMI-ANNUAL REPORT AND UNAUDITED FINANCIAL STATEMENTS
For the half year ended 31 March 2014
APPENDIX 1 – TOTAL EXPENSE RATIOS (UNAUDITED)
Total Expense Ratios are based on the trading 12 months preceding the dates listed below.
For the period/year ended
31 March 2014
30 September 2013
Yacktman
Class A US$
Class AD US$
Class AE EUR
Class AG1 GBP
Class B US$
Class C US$
Class CD US$
Class I US$
Class I1 US$
Class ID US$
Class IE EUR
Class IG GBP
Class IGD GBP
1.62%
1.62%
1.62%
1.63%
2.07%
1.12%
1.11%
1.27%
1.27%
1.27%
1.27%
1.27%
1.27%
1.62%
–
–
1.64%
2.08%
1.12%
–
1.27%
1.28%
1.33%
1.28%
1.31%
1.30%
Helicon
Class D US$
Class I US$
Class IH CHF
Class R US$
Class S US$
0.97%*
1.50%*
–
2.11%*
1.29%*
1.89%
2.96%
2.48%
3.69%
2.08%
Oppenheimer
Class A US$
Class A1 US$
Class B US$
Class C US$
Class CE EUR
Class I US$
Class I1 US$
Class IE EUR
Class IF US$
Class IG GBP
1.76%
1.74%
2.23%
1.17%
1.13%
1.41%
1.44%
1.40%
1.75%
1.39%
1.80%
–
2.28%
1.17%
1.11%
1.45%
1.52%
1.43%
–
1.36%
Kopernik
Class C US$
Class CD US$
Class CE EUR
Class I US$
1.63%
1.64%
1.61%
1.85%
–
–
–
–
Oppenheimer Global
Class C US$
Class CE EUR
1.13%
1.06%
–
–
* The figures do not include performance fees as per industry guidance.
69
HEPTAGON FUND PLC
SEMI-ANNUAL REPORT AND UNAUDITED FINANCIAL STATEMENTS
For the half year ended 31 March 2014
APPENDIX 2 – PORTFOLIO TURNOVER RATES (UNAUDITED)
For the period/year ended 31 March 2014 and 30 September 2013, the portfolio turnover of the assets reflects the
turnover ratio of the Sub-Fund’s assets during the period/year ended 31 March 2014 and 30 September 2013
expressed as a ratio on a twelve month period basis of average net assets.
For the period/year ended
31 March 2014
30 September 2013
(41.15%)
(30.99%)
Helicon
93.11%
119.00%
Oppenheimer
30.54%
25.86%
Kopernik
29.21%
–
Oppenheimer Global
39.61%
–
Yacktman
70