BK Opportunities Fund 4 - Crystal Fund

BK Opportunities
Fund 4

Quarterly Report | 31 March 2022

BK Opportunities Fund-4 is making a quarterly distribution to its investors for the 31st March 2022 quarter-end of 20.00% (cash on cash, non-annualized) of its capital contribution (in USD). Payments are being wired on 26th April 2022.

Furthermore, the N.A.V. of BK Opportunities Fund-4 as of the 31st March 2022 after the distribution is 52.24% of its capital contribution (in USD).

BK Opportunities Fund-4 updated performances are:
March 2022 Monthly Return (non-annualized): +6.1%
March 2022 Year-to-Date Return (non-annualized): +5.9%
March 2022 Annual Return since inception(1): +6.3%
Cumulative Distributions since inception/Mar. 20172: 74.0%
Cumulative Return since inception/Mar. 2017 (Distributions + NAV gain)(1): +26.2%

(1) Based on the weighted average return of all classes since their respective closing date.

Market Commentary & Portfolio Overview

Ukraine War

Since February, the war has hung news and business in Ukraine while the world was getting away from the Covid disruption. A widespread international embargo has cut Russia’s economy from most of the world. Many Russian assets are frozen, and many private companies are leaving Russian operations. The two significant impacts on the world economy are shortages in energy, mainly oil and gas, and commodities like Nikel or wheat. Energy shortages have an immediate impact on developed economies, mainly in Europe. On the commodity front, the impact is a more slow burn. The reaction was strong on the U.S. and on the E.U sides. The Biden Administration ordered record oil releases from the strategic reserve and invoked Cold War powers to encourage domestic production of critical minerals. The E.U. is coordinating to immediately reduce its reliance on Russian energy and possibly stop it completely. With no end in sight to the Ukrainian conflict, its impact on the global economy will continue from higher energy prices to a food shortage; Ukraine produced 30% of the worldwide wheat export.

Inflation vs The Economy

The U.S. economy has “gone from being on the mend to on the move,” said President Joe Biden, as a solid March jobs report a strengthened job market. Before the Ukraine conflict, inflation was the central area of concern. While the U.S. is comparatively insulated from the Russia-Ukraine crisis, it fuels more price increases. The U.S. economy looks better than last quarter. Fear of stagflation is overblown as corporate solid balance sheets and recovering service sector activity, while the labour is picking up, should prevent a global recession this year. Fed Chair Jerome Powell has said recently that the Fed would support a more aggressive monetary policy to curb decades-high inflation, including a likely 50-basis-point hike at the next policy meeting in early May. The market remains highly volatile and undecided on its direction.

Corporate Markets

2022 has been volatile from high expectations about moving on from Covid to the war in Ukraine. Corporates still suffer from the covid disorganized supply chain before being impacted by the Ukrain war externalities. This was reflected by the S&P 500 is down 5% year to date in mid-April. On the credit side, fears of higher costs would squeeze corporate profitability and then increase the risk of default can explain the significant dip of the LSTA U.S. Leveraged Loan 100 Index in mid-March. Those fears were lifted when data showed costs were being passed to the customer, and the LSTA index returned to year-end levels. Interestingly defaults are not a driver of return, as the LSTA default rate went down to 0.19% in March from 0.29% in January.

CLO Update & activities

In parallel, CLO tranches secondary trading prices have dropped by several points at the beginning of the Ukrainian crisis, but have stabilized in this context since then. As primary market was subdued, market players with reinvestment capacity have increased participation in secondary activity. As usual in this environment, investment grade tranches showed more consistency in trading than the more mezzanine tranche. This gave rise to trading opportunities. As BK Opportunities Fund-4 is in amortization mode, we are focusing on monetizing our remaining positions. While we could reset several of our positions before the Ukrainian war, some CLO are now being redeemed (rather than restructured) since primary market (necessary to place newly restructured tranches) is quieter in the current volatile environment.

BK Opp. Fund 4

Following the reset and redemption of various positions, BK Opp. Fund-4 is making a large distribution of 20.00% ($200.00 per share) this quarter (payments are being wired on the 26 of April 2022), bringing the total distribution since inception at 74.00% ($740.00 per share) non-annualized. The cumulative return as of 31 March 2022, which blends distribution and NAV profits, is +26.2%. Based on the weighted average internal rate of return (IRR) of all classes since inception at their respective entry price, BK Opp. Fund-4 annual return is +6.3% (all returns are net). We are now focusing on monetising the remaining positions; we believe the fund’s performance should increase in the coming quarters.

Fund’s Summary

Currency USD
Fund’s Inception April 2017
Last Closing July 2018
Maturity(5) July 2023
Distribution Quarterly
Investment Manager Oristan Ireland DAC
Administrator Apex Funds Services
Custodian CIBC Bank & Trust
Counsel Dillon Eustace
Auditor Deloitte
Bloomberg Page BKOPP4A KY
(5) Excluding the possible 2‐year extension

Fund and Market Performances as of 31 March 2022


Monthly Performances




Cumulative and Quarterly Distribution


Portfolio Manager
Olivier Gozlan


+44 208 089 11 35
This is not for distribution to, or use by, any person or entity in any jurisdiction where such distribution or use would be contrary to law or regulation. The information contained herein is for information only and does not constitute an offer regarding any product. The document has been prepared by Oristan Ireland DAC and the data have not been audited nor verified. Past performance cannot indicate future performance. There is no assurance that the investment objective will be achieved and investment results may vary.