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BK Investment Grade 8
Quarterly Report | 31st March 2025
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The final NAV and distribution of the BK Investment Grade 8 (USD / EURO) as of 31 March 2025 is:
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| USD Class |
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EURO Class |
NAV 108.91%
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NAV 108.30%
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Distribution 1.00%
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Distribution 1.00%
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Payments for the Euro and Dollar class will be on January 29th 2025.
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BK Opportunities Fund-8 final net performances
as of 31st March 2025
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| Monthly1 |
+0.7% |
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Monthly1 |
+0.3% |
| Year-to-Date1 |
+2.2% |
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Year-to-Date1 |
+2.3% |
| Annual Return3 |
+12.3% |
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Annual Return3 |
+12.9% |
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10.0% |
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+18.9% |
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+18.3% |
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3 - Weighted average distribution of all classes.
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Fund and Market Performances as of 31st March 2025
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USD
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EUR
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Monthly Performances
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USD Performances
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EUR Performances
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Look through Fund's Statistics
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| Industry |
% of Portfolio |
| High Tech Industries |
11.4% |
| Services: Business |
9.5% |
| Banking, Finance, Insurance & Real Estate |
9.5% |
| Healthcare & Pharmaceuticals |
8.8% |
| Construction & Building |
5.0% |
| Chemicals, Plastics & Rubber |
4.7% |
| Hotel, Gaming & Leisure |
4.4% |
| Telecommunications |
3.9% |
| Media: Broadcasting & Subscription |
3.8% |
| Capital Equipment |
3.8% |
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| Issuer |
% of Portfolio |
| Liberty Global |
1.2% |
| Ineos |
1.1% |
| Vmed O2 UK |
1.1% |
| Asurion |
0.9% |
| Altice NV |
0.8% |
| American Online |
0.7% |
| Medline Borrower |
0.7% |
| Transdigm Group |
0.6% |
| Atlas |
0.6% |
| Celestial |
0.6% |
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Market Commentary & Portfolio Overview
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In Q1 2025, both the U.S. and euro area economies demonstrated resilience amid growing macroeconomic headwinds, with rising inflation, geopolitical tensions, and tightening financial conditions reshaping corporate performance, credit markets, and structured finance activity across both regions.
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The Economy: Macro Crosscurrents
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The U.S. economy grew at an annualised rate of 2.5% in Q1 2025, slightly exceeding expectations, while the euro area posted modest quarter-on-quarter growth of 0.2%. U.S. inflation stayed above the Fed's 2% target, with CPI at 2.4%, prompting a cautious monetary stance. In contrast, the ECB executed another rate cut—bringing the deposit rate to 2.25%—to support domestic demand in a sluggish recovery. Labour markets in both regions remained broadly stable, though euro area forward-looking indicators remained soft, with external trade frictions and uneven industrial output capping momentum. Both economies navigated diverging monetary cycles and shared geopolitical uncertainties that tempered full-year growth expectations.
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Corporate Markets: Mixed Corporate on Both Sides of the Atlantic
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In the U.S., corporate performance in Q1 was sectorally bifurcated, with tech and energy firms outperforming, while manufacturers and retailers faced margin pressure from rising costs and cautious consumers. Similarly, in the euro area, earnings were uneven: industrial and export-driven firms struggled due to global trade tensions, while service and consumer sectors proved more resilient. U.S. corporate forward guidance reflected caution amid tighter financial conditions, while European corporates posted a projected 3.5% earnings decline—the steepest drop since 2023. Across both regions, trade, rates, and inflation uncertainty led to more conservative guidance and a general shift toward cost discipline.
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Corporate Loans: Selectivity
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The corporate loan markets in both regions remained active but showed early signs of repricing and greater selectivity. In the U.S., primary issuance was steady but increasingly skewed toward higher-rated borrowers as spreads widened in lower-quality tiers. The euro loan market saw a modest decline in volume, particularly for speculative-grade borrowers, with banks tightening standards and moderating investor risk appetite. Despite these headwinds, institutional demand persisted in core European markets such as Germany and France. In both regions, covenant-lite structures continued to dominate, but new deals featured slightly stronger terms, reflecting a cautious shift in underwriting behaviour.
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CLO Market: Risk Repricing
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CLO activity remained resilient in both the U.S. and Europe in Q1 2025, though signs of recalibration emerged. U.S. CLO issuance was healthy, driven by demand for insurance and pension funds, while European issuance held steady despite macro headwinds. AAA tranche spreads widened modestly in both regions amid broader credit market volatility, and managers became more selective, favouring sectors with stable cash flows. Warehouse activity cooled slightly, especially in Europe, and CLO portfolios saw reduced exposure to cyclical and highly leveraged names. Secondary market liquidity remained decent on both sides, but investor tone grew more cautious.
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BK Investment Grade Fund 8: Performances
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We saw the earlier trend of general spread tightening in the first quarter of 2025. Still, toward the end of the quarter, and certainly during the first week of April, there was high volatility due to tariffs and US government announcements. In preparation for the phase of volatility over the quarter, we have been focusing since Q3 2024 on reinvesting in shorter-duration security with a high coupon. As spreads started widening towards the quarter-end (and earlier in the 2nd quarter), the priority has been on reinvestment, as current market volatility has created attractive entry points. The objective is to increase the expected returns while maintaining the same resistance levels.
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The fund is distributing 1.0% for each USD and Euro class this quarter, resulting in a total distribution of 10% since inception. Payments are being made on April 29, 2025.
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Since its inception, the USD portfolio has delivered 12.3% annually, and the Euro portfolio has delivered 12.9%, materially exceeding our expectations. We believe the portfolio will continue to deliver strong performances as we maintain our trading discipline and strategy.
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Fund’s Summary
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| Currency |
USD and EUR |
| Fund’s Inception |
June 2023 |
| Distribution |
Quarterly |
| Investment Manager |
Oristan Ireland DAC |
| Administrator |
Apex Funds Services |
| Custodian |
CIBC Bank & Trust |
| Counsel |
Dillon Eustace |
| Auditor |
Deloitte |
| Bloomberg Page |
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BKIG8AU KY <Eqty> (USD KY Feeder)
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BKIG8AE KY <Eqty> (EUR KY Feeder)
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BK8A1US LX <Eqty> (USD LX feeder)
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BK8A1EU LX <Eqty> (EUR LX Feeder)
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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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