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BK Investment Grade 8
Quarterly Report | 31st December 2025
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This erratum is being issued to formally correct the USD NAV previously reported in our newsletter.
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The final NAV and distribution of the BK Investment Grade 8 (USD / EURO) as of 31 December 2025 is:
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| USD Class |
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EURO Class |
NAV 109.12%
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NAV 111.91%
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Distribution 1.50%
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Distribution 1.50%
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Payments for the Euro and Dollar class will be around January 30th, 2026.
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As part of our ongoing efforts to enhance communication with investors, the Crystal Fund newsletter—previously distributed exclusively by email—is now also available in PDF format. You can access the latest edition here.
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BK Opportunities Fund-8 final net performances
as of 31st December 2025
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| Monthly1 |
+0.0% |
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Monthly1 |
+0.8% |
| Year-to-Date1 |
+6.7% |
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Year-to-Date1 |
+10.1% |
| Annual Return3 |
+9.9% |
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Annual Return3 |
+11.8% |
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14.5% |
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+23.6% |
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+26.4% |
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3 - Weighted average distribution of all classes.
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Fund and Market Performances as of 31st December 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 |
| Healthcare & Pharmaceuticals |
10.1% |
| Services: Business |
9.1% |
| High Tech Industries |
8.8% |
| Banking, Finance, Insurance & Real Estate |
7.2% |
| Chemicals, Plastics & Rubber |
5.4% |
| Telecommunications |
4.5% |
| Construction & Building |
4.5% |
| Hotel & Leisure |
4.3% |
| Beverage, Food & Tabaco |
4.1% |
| Capital Equipment |
3.8% |
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| Issuer |
% of Portfolio |
| Ineos |
1.4% |
| Liberty Global |
1.2% |
| Vmed O2 UK |
0.9% |
| Altice NV |
0.8% |
| 3I Group |
0.6% |
| Kantar Global |
0.5% |
| Lorca Jvco |
0.5% |
| Ion Platform |
0.5% |
| Sigma Holding |
0.4% |
| IVC Acquisition |
0.4% |
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Market Commentary & Portfolio Overview
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In 2025, the global economy achieved a long-awaited "soft landing" as inflation retreated to central bank targets without triggering a recession. While the US outperformed with 2.6% GDP growth and a booming AI-driven stock market (S&P 500 +24%), the Eurozone remained resilient at 1.4% growth with a significant recovery in the financial sector. The credit story was one of bifurcation: headline default rates stayed low, but a surge in "shadow defaults" (LMEs) revealed underlying stress in both regions. Meanwhile, the CLO market entered a new era, driven by retail ETF inflows in the US and a massive regulatory overhaul (Solvency II) in Europe that unlocked billions in insurance capital.
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The Economy: Different Speed Stabilisation
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Western economies successfully navigated the transition from aggressive rate-hiking to a "higher-for-longer" plateau. Real GDP grew by 1.4% in Europe. Headline inflation hit the ECB’s 2.0% target in December, while the deposit facility rate was held steady at 2.00% to manage stickier core inflation (2.4%). The US economy remained the global engine with 2.6% growth. The Federal Reserve maintained a more restrictive stance than the ECB, ending the year with rates at 3.75% to ensure labor market cooling remained on track.
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Corporate Markets: Record Highs & Currency Shifts
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The S&P 500 (+24%) dominated the first half of the year, driven by "Magnificent Seven" tech earnings. In the second half, capital began rotating into "value" sectors and European markets as US valuations reached a 30% premium over historical averages. In Europe, the STOXX 600 (+17%) was led by the banking and healthcare sectors. However, a 13.4% appreciation of the Euro against the USD acted as a headwind for European exporters while boosting returns for domestic investors.
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Corporate Loans: The "Dual-Track" Default Reality
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A clear "bifurcation" emerged in 2025 between companies with healthy balance sheets and those buried in high-interest debt. Official payment defaults remained low (1.08% in Europe, 1.45% in the US). However, Liability Management Exercises (LMEs)—where borrowers restructure debt out-of-court—pushed "dual-track" default rates to 2.15% in Europe and 4.2% in the US. Over 30% of this restructuring activity was concentrated in the Media, Healthcare, and Consumer Products sectors, where firms struggled with the lagged effects of elevated interest rates.
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CLO Market: The Institutional Overhaul
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Issuance volume broke records as structural changes brought new types of buyers into the Collateralized Loan Obligation market. Europe (Solvency II Overhaul): The most significant shift was the 2025 Solvency II Reform, which slashed capital charges for insurers holding AA tranches from 37.5% to just 8.1%. This transformed senior CLO tranches into highly capital-efficient corporate bond substitutes for European insurance giants. USA (ETF Retailization): The US market was buoyed by a "retail wave." CLO ETFs (like JAAA) surpassed $30 billion in AUM, providing a permanent, liquid bid for AAA and AA tranches that helped keep US spreads stable despite higher local SOFR rates.
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BK Investment Grade Fund 8: Portfolio Overview
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We have built a robust portfolio of BBB CLO tranches with USD (56%) and Euro (44%) positions. The portfolio is diversified by profile (the style of the CLO manager), vintage, and duration. We have participated in both new issues and the secondary markets, but have been more active in the latter over the recent months.
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The priority has been on selecting our reinvestments given current market conditions and a spread-tightening environment; we receive both interest (from the payment of the coupon) and principal (from transactions being restructured, more precisely called resets). If a portion is kept for distribution, most of these proceeds are reinvested as we identify opportunities that fit our target return for BK Investment Grade-8. The objective is to maximize the expected returns while maintaining the same resistance levels. The portfolio is designed to benefit from a market softening but also resist more conservative scenarios. The fund distributes 1.5% for each USD and Euro class this quarter, bringing the total distribution to 14.5% since inception. Payments are being wired on or around 30th January 2026.
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Since its inception, the USD portfolio has delivered 10.7% annually, and the Euro portfolio has delivered 11.8%, 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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