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BK Opportunities
Fund 7
Quarterly Report | 31st Mar 2025
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The final N.A.V. and distribution of BK Opportunities Fund-7 (Euro) as of March 31, 2025 is:
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NAV
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83.35%
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Distribution
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2.24%
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Payments will be wired around the 30th of April 2025.
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BK Opportunities Fund-7 final net performances
as of 31st March 2025
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| Monthly Return (non-annualized) |
+0.5% |
| Year-to-Date (non-annualized) |
+3.8% |
| Annual Return since inception1 |
+14.8% |
| Cumulative Distributions since inception/October 20212 |
+54.4% |
| Cumulative Return since inception/October 20212 |
+42.7% |
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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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In Q1 2025, the euro area economy posted modest growth, as external trade tensions, rate cuts, and uneven corporate earnings shaped conditions across the real economy, credit markets, and structured finance.
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The Economy: Balancing Act
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The euro area economy grew by 0.2% quarter-on-quarter in Q1 2025, reflecting a fragile recovery under pressure from global trade frictions and domestic policy uncertainty. Inflation hovered around the ECB’s 2% target, while the ECB executed another rate cut—bringing the deposit facility rate to 2.25%—in a continued effort to support demand. Labour markets remained broadly stable.
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Corporate Markets: Diverging Outlooks
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European corporates experienced uneven performance in Q1, with export-heavy and industrial firms hit the hardest by tariff impacts and weak external demand. Conversely, consumer-facing and service sector businesses were better, supported by still-strong labour markets and targeted fiscal support in some member states. The theme for the rest of the year turned more cautious amid persistent geopolitical uncertainty.
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Credit Market: Active Market
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In 2024, the European leveraged loan market saw €192 billion in issuance, driven primarily by refinancing, repricing, and amendments, which accounted for 88% of activity. New money deals like LBOs were limited, with the market focusing on managing existing debt. Margin compression occurred as central banks eased rates, boosting liquidity and investor interest. The syndicated loan market regained ground from private credit funds, but the pipeline for new deals remained thin.
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Loan Market: Conservative Lending
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The corporate loan market in Europe turned more conservative, with lenders tightening underwriting standards and investors leaning toward higher-quality credits. Loan origination volumes were down slightly year-on-year, particularly in speculative-grade segments. Spreads widened in response to risk aversion and soft macro data, and banks reported reduced risk appetite in the ECB’s lending survey. Nonetheless, core markets such as Germany and France continued to attract institutional loan demand, particularly for defensive sectors.
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CLO Market: Steady Activity
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The European CLO market remained active in Q1, with steady new issuance despite macro headwinds. Investor demand for AAA tranches stayed solid, though spreads widened slightly across the stack. CLO managers showed greater selectivity in ramping portfolios, favouring defensive industries and higher-rated loans. While primary issuance continued, warehouse activity slowed somewhat, and secondary trading volumes signalled increased risk awareness among market participants amid concerns about loan performance and future default rates.
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BK Opp. Fund 7: 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 2.24% this quarter, resulting in a total distribution of 54.4% since inception. Payments are due on April 30, 2025.
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Since its inception, the fund has delivered an annual return of 14.8%, 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 and Market Performances as of 31st March 2025
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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 |
15.8% |
| Services: Business |
9.5% |
| Chemicals, Plastics & Rubber |
7.1% |
| High Tech Industries |
6.8% |
| Telecommunications |
6.6% |
| Construction & Building |
5.7% |
| Banking, Finance, Insurance & Real Estate |
5.4% |
| Services: Consumer |
4.9% |
| Beverage, Food & Tobacco |
4.6% |
| Hotel, Gaming & Leisure |
4.5% |
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Top 10 Issuers Exposure
| Issuer |
% of Portfolio |
| Ineos Limited |
2.1% |
| Liberty Global |
1.3% |
| Altice NV |
1.4% |
| ION Group |
1.3% |
| 3I Group |
1.1% |
| Lorca JVCO |
1.0% |
| VMED O2 UK |
0.9% |
| Verisure |
0.8% |
| Laboratoire EIMER |
0.8% |
| Chrome Topoc |
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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