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BK Opportunities
Fund 7
Quarterly Report | 31st March 2026
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The final N.A.V. and distribution of BK Opportunities Fund-7 (Euro) as of March 31, 2026, is:
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NAV
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52.55%
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Current Distribution
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6.25%
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Distributions Since Inception1
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Payments will be made on or around May 1st, 2026.
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BK Opportunities Fund-7 final net performances
as of 31st March 2026
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| Monthly Return (non-annualized) |
-1.1% |
| Year-to-Date (non-annualized) |
-3.4% |
| Annual Return since inception2 |
+13.0% |
| Cumulative Distributions since inception/October 20211 |
+89.9% |
| Cumulative Return since inception/October 20211 |
+45.8% |
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1 — Weighted average distribution of all classes.
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2 — Based on the weighted average internal rate of return (“IRR”) of all classes from their respective closing date at their respective entry price.
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Market Commentary & Portfolio Overview
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The eurozone started 2026 with improving momentum, but the Middle East conflict has clouded the outlook — growth revised down, inflation revised up, ECB on hold. Corporate earnings remain still after three years without profit growth. Bank lending is tightening, though demand is picking up. Leveraged loan issuance hit records in 2025 but was mostly refinancing, not new deals. CLO issuance also hit records with strong pipeline activity, though the arbitrage is squeezed by tight loan spreads. Across the board, the market needs M&A to come back for fresh supply.
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The Economy
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The eurozone’s early 2026 momentum—marked by a 51.9 PMI and recovering manufacturing—is now threatened by escalating Middle East conflict, driving oil toward $90/bbl. Consequently, GDP forecasts have cooled to 0.8–1.3%, with a 0.2% drag from energy shocks. While Spain outperforms (1.8%), Germany and France lag (0.9%). Meanwhile, the ECB has raised inflation forecasts by 0.7pp and is expected to hold rates at 2% pending further data.
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Corporate Markets
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European Q4 2025 earnings fell 1.1%, a notable recovery from the 3.1% decline initially feared—yet the market’s three-year rally remains fragile without stronger corporate results. While 2026 EPS growth for Europe is projected at a modest 4%, sectoral performance is split: autos and chemicals struggle with Chinese competition and high energy costs, whereas energy giants like TotalEnergies and Eni have surged 40–50% in Q1. Despite these headwinds, corporate balance sheets remain resilient due to high cash reserves and inflation’s erosion of real debt value. Furthermore, Europe’s limited exposure to private credit (1.5% of total corporate credit vs. 7% in the US) provides a significant structural buffer against potential contagion from US private credit volatility.
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Loan Market
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The ECB's Q4 2025 Bank Lending Survey revealed an unexpected net tightening of credit standards for corporate loans at 7%, a trend fueled by rising risk aversion in Germany and France that is expected to persist through Q1 2026. Despite these stricter standards, loan demand is rebounding—particularly in Germany and Italy—as firms seek financing for working capital, refinancing, and a resurgence in M&A activity. This shifting landscape sees corporates increasingly favoring bond markets over traditional bank loans, a structural transition accelerated by post-GFC regulations and historical ECB support. As the European credit cycle enters a re-leveraging phase driven by a recovery in capital expenditure, Non-Performing Loan (NPL) ratios are forecast to edge up modestly, though they are projected to remain well below the volatility seen during previous crisis-era peaks.
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CLO Market: The AA Demand Shift
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Primary European CLO issuance reached a record near €60bn in 2025, supported by an additional €49bn in resets, bringing the total market outstanding to approximately €300bn. The outlook for 2026 remains robust, with bank forecasts projecting between €50bn and €65bn in new issuance and a significant surge in resets as 2024 vintages exit their non-call periods. While AAA spreads have tightened considerably to around 123bps, market participants are preparing for modest widening throughout the year, even as lower funding costs begin to improve equity economics. Structurally, the market is evolving toward larger €500m deal sizes and the emergence of CLO ETFs as a new liquidity channel for AAA tranches. Despite the entry of several debut managers and growing interest in private credit CLOs, the sector faces headwinds from geopolitical tensions in the Middle East and a deepening bifurcation in loan quality that is driving increased manager tiering.
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BK Opp. Fund 7: Performances
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BK Opportunities Fund 7 (BK-7) was launched in Q2 2021. Over the years, we have actively traded BB and B-rated tranches of European CLOs. Our portfolio has remained very diversified across all sectors, with a very low idiosyncratic exposure. In addition to capturing the usual extra return of CLOs from its niche market, we have employed various structural arbitrage strategies, in some cases linked to the duration of our positions.
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This quarter, BK Opportunities Fund-7 is making a weighted average distribution of 6.25% (non-annualised, based on number of shares). Payments will be wired on 30 April 2026. The cumulative distribution of the fund is 89.92% (non-annualized, based on the weighted average distribution of all classes), and the annual return since inception is +13.0% (net), materially exceeding our expectations at the fund’s launch.
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The fund has exited its reinvestment phase and is now amortising, so we are focusing on monetising our positions. As we collect coupons & principal and now distribute all proceeds, the fund’s performance should continue to strengthen, and distribution will accelerate.
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Fund and Market Performances as of 31st March 2026
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Monthly Performances
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Cumulative and Quarterly Distribution
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Top 10 Industry Exposure
| Industry |
% of Portfolio |
| Healthcare & Pharmaceuticals |
14.6% |
| Services: Business |
9.2% |
| High-Tech Industries |
7.2% |
| Chemicals, Plastics & Rubber |
6.9% |
| Telecommunications |
6.2% |
| Construction & Building |
5.7% |
| Banking, Finance, Insurance & Real Estate |
5.4% |
| Beverage, Food & Tobacco |
5.1% |
| Capital Equipment |
4.7% |
| Services: Consumer |
4.2% |
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Top 10 Issuers Exposure
| Issuer |
% of Portfolio |
| Ineos Ltd |
2.0% |
| Liberty Global |
1.8% |
| Lorca JVCO |
1.2% |
| Vmed O2 UK |
1.1% |
| 3I Group |
1.0% |
| TK Elevator Topco |
0.8% |
| Kantar Global |
0.8% |
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0.8% |
| Ion Platform |
0.8% |
| Quimper Ab |
0.8% |
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Fund’s Summary
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| Currency |
EUR |
| Fund’s Inception |
October 2021 |
| Distribution |
Quarterly |
| Investment Manager |
Oristan Ireland DAC |
| Administrator |
Apex Funds Services |
| Custodian |
CIBC Bank & Trust |
| Counsel |
Dillon Eustace |
| Auditor |
Deloitte |
| Bloomberg Page |
BKOPP7A KY <Eqty> |
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Portfolio Manager
Olivier Gozlan
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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.
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