Overview
Axiom European Financial Debt Fund Limited has published its Financial Report for the period from 7 October 2015 (date of incorporation) to 31 December 2016. The Company effectively commenced operations on 5 November 2015 when it was admitted to trading on the SFS. Net of launch expenses, the Company started with a Net Asset Value per share of 98.00p and ended with a NAV per share of 95.21p, having paid dividends of 4.35p and with the balance of the first year’s dividend paid after the year end on 24 February 2017.
The early months of Axiom’s life were especially challenging. A combination of ever-tightening capital requirements from regulators and slowing growth raising concerns over the future outlook for credit quality to name but two factors, led to brutal mark-downs across the market in general through January and February 2016. The company could not be immune from the wider market malaise with its NAV per share bottoming out at 86.39p on 12 February 2016 before recovering steadily through the remainder of the year.
They say that the total NAV return of +1.59% for the period, while below their 7-year target return of 10% p.a., should therefore be seen in the context of these circumstances and in that light, is a creditable result. To some extent, Axiom were able to avoid the worst by lightening exposures into the downswing and becoming more fully-invested as it played out, exploiting the natural advantages of the company’s closed-ended structure by opportunistically increasing exposures at market lows when, in contrast, open-ended funds are often at their most vulnerable to being forced sellers to meet investor redemptions. This is especially the case where the instruments held in the portfolio are relatively illiquid at the best of times.
AXI : Axiom European Financial return lagging objective