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BK Opportunities
Fund 9
Quarterly Report | 31st March 2026
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The final N.A.V. and distribution of BK Opportunities Fund-9 (USD/EUR) as of March 31, 2026, are:
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BK Opportunities Fund-9 final net performances
as of 31st March 2026
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| Monthly Return (non-annualized) |
-0.1% |
| Year-to-Date (non-annualized) |
+0.9% |
| Annual Return since inception1 |
+10.6% |
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1 — 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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2 — Weighted average distribution of all classes.
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Market Commentary & Portfolio Overview
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The US economy is holding up well, powered by tax cuts and AI investment, though the job market is cooling. Corporate earnings continue to impress with a sixth straight quarter of double-digit growth — but Tech is doing most of the heavy lifting. In leveraged loans, default rates are creeping higher and Q1 returns were the weakest since 2020; software is the most troubled sector. CLO issuance is expected to ease from last year's records but remain strong, boosted by growing ETF demand. Key concerns: geopolitical risk, software sector stress, and private credit redemption pressures.
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The Economy
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The US remains the global frontrunner with 2026 GDP growth projected at 2.4%, as the "One Big Beautiful Bill Act" tax cuts offset tariff drags and cooling job gains. However, the Federal Reserve’s path remains constrained; persistent AI-related capex and rising energy costs, alongside inflationary trade policies, leave little room for aggressive rate cuts.
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Conversely, the Eurozone’s early 2026 recovery has been clouded by escalating Middle East conflict, with oil nearing $90/bbl and gas prices spiking. Consequently, consensus GDP has been revised down to 0.8–1.3%. This regional weakness is further exacerbated by a sharp divergence between a resilient Spain (1.8%) and a stagnant Franco-German core (0.9%).
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Corporate Markets
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The Federal Reserve has guided interest rates toward a 3.50–3.75% neutral range, stabilizing corporate investment and reviving the IPO and M&A pipelines. While overall credit quality remains solid, a "two-speed" consumer landscape has emerged: higher-income households continue to spend freely while lower-income cohorts pull back.
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In the Eurozone, the credit environment is more constrained following an unexpected tightening of bank lending standards in Germany and France. Despite this, corporate loan demand is rising for working capital and refinancing, particularly in Germany and Italy. This tension is accelerating a shift from bank loans to bond markets, signaling a broader re-leveraging phase as regional capital expenditure begins to pick up.
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Loan Market
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The U.S. loan market faces increasing pressure, with the trailing 12-month payment default rate at 1.44% and the LME-inclusive dual-track rate at 3.48%. Geopolitical risks and tightening credit remain key concerns, especially in the $250bn software sector, which stands as the market's largest but most out-of-favour segment.
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Europe shows more resilience with a lower 1.1% default rate, though speculative-grade defaults are forecast to rise toward 3.25% by late 2026. While 2025 saw record gross issuance, most was driven by refinancing rather than new capital. In both regions, a sustained M&A recovery is now the essential prerequisite for fresh issuance, amid ongoing concerns over private credit redemption pressures and sharp price drops for downgraded credits.
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CLO Market
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The US CLO market enters 2026 with a constructive tone following 2025’s record $200bn issuance. While new supply is forecast between $150bn and $220bn, the focus is shifting toward a massive refinancing wave, with $430bn in portfolios now eligible for repricing. This momentum is bolstered by the rapid institutionalization of the asset class, seen in CLO ETFs reaching $38bn in AUM, and an expected recovery in M&A-driven loan supply that should improve equity arbitrage.
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European CLO markets also hit records in 2025, reaching €60bn in primary issuance and bringing the total outstanding to €300bn. The 2026 outlook remains ambitious, supported by 150 open warehouses and a trend toward larger €500m deal sizes. Although AAA spreads have tightened to ~123bps, the market faces risks from geopolitical shocks and loan quality bifurcation. However, the entry of new managers and the rise of European CLO ETFs provide strong liquidity to manage the anticipated uptick in reset and refinancing activity.
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BK Opp. Fund 9: Performances
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We are building a robust portfolio of CLO tranches, balanced between euros and dollars. The portfolio is diversified by profile (the style of the CLO manager), vintage, and duration. We have participated in both new issues and secondary markets, but have been more active in the secondary markets in recent months.
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Given current market conditions and a tight spread environment, we focus on instruments that provide both interest (from coupon payments) and principal (from transactions being restructured, more precisely referred to as resets). The objective is to maximise the expected returns while maintaining a healthy level of resistance. The portfolio is designed to benefit from a market softening but also resist more conservative scenarios.
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Since its inception, the portfolio has delivered 10.6% annually, materially exceeding our expectations. The portfolio will continue to deliver strong performances as we maintain our trading discipline and strategy.
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Fund and Market Performances as of 31st March 2026
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Top 10 Industry Exposure
| Industry |
% of Portfolio |
| Healthcare & Pharmaceuticals |
7.25% |
| Services: Business |
6.1% |
| High-Tech Industries |
6.1% |
| Chemicals, Plastics & Rubber |
6.0% |
| Telecommunications |
5.9% |
| Construction & Building |
5.8% |
| Beverage, Food & Tobacco |
5.4% |
| Banking, Finance, Insurance & Real Estate |
5.4% |
| Capital Equipment |
4.5% |
| Services: Consumer |
4.0% |
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Top 10 Issuers Exposure
| Issuer |
% of Portfolio |
| Ineos Ltd |
2.0% |
| Liberty Global |
1.8% |
| Vmed O2 UK |
1.2% |
| Lorca JVCO |
1.1% |
| 3I Group |
1.0% |
| Quimper Ab |
0.8% |
| Althea Acq |
0.8% |
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0.8% |
| Laboratoire EIMER |
0.8% |
| Altice NV |
0.8% |
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Fund’s Summary
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| Currency |
USD/EUR |
| Fund’s Inception |
October 2025 |
| Distribution |
Quarterly |
| Investment Manager |
Oristan Ireland DAC |
| Administrator |
CSC Funds Services |
| Custodian |
CIBC Bank & Trust |
| Counsel |
Dillon Eustace |
| Auditor |
Deloitte |
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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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