Interim Management Statement 1 April - 30 June 08

    RNS Number : 9404A
  Bramdean Alternatives Limited
  08 August 2008
   

    Bramdean Alternatives Limited
    8 August 2008

    Interim Management Statement
    For the period 1 April 2008 to 30 June 2008


    This Interim Management Statement relates to the period from 1 April 2008 to 
    30 June 2008 and contains information that covers that period, unless otherwise stated. 

    A print format of this RNS announcement is available on the Company's website: www.bramdeanalternatives.com.



    Company Overview

    Bramdean Alternatives Limited (the "Company") is a Guernsey-based Investment Company listed on the London Stock Exchange. The Company's
investment objective is to generate long-term capital gains. The Company has appointed Bramdean Asset Management LLP ("Bramdean") as its
investment manager. Bramdean is responsible for the management of the Company's assets, subject to the overall supervision of the Company's
Board.

    The Company invests in a diversified portfolio of private equity funds, hedge funds and other specialty funds and may additionally hold
direct holdings in unquoted companies and quoted securities. The portfolio of investments is intended to be diversified by country, industry
sector, investment stage and size of investment, as well as by strategy.

 KEY DATA OVERVIEW

 30/06/08                 31/03/08         30/06/08         Comparative
 Sterling Share class                                       performance
 Net Asset Value          98.55 pence      101.11 pence     + 2.6%
 Share price              80.50 pence      85.75 pence      + 6.5%

 30/06/08                 31/03/08         30/06/08         Comparative
 U.S. Dollar Share class                                    performance
 Net Asset Value          US$ 0.9782       US$ 1.0005       + 2.3%
 Share price              US$ 1.02         US$ 1.02         Unchanged

 30/06/08                 31/03/08         30/06/08         Comparative
 Financial Position                                         performance
 Total common assets      US$ 256,906,281  US$ 262,161,415  +2.0%
 Net Asset Value          US$ 256,400,905  US$ 262,722,531  + 2.5%

 30/06/08
 Annualised Performance
 Measures
 Sharpe ratio             N/A              1.4              N/A
 Volatility               N/A              2.2%             N/A

    Share prices shown are official Stock Exchange closing

    Sources:
    London Stock Exchange
    Company's Administrator
    Bramdean Asset Management LLP



                                                                                                     KEY FACTS
                                                   MANAGER                       BRAMDEAN ASSET MANAGEMENT LLP
                                TOTAL ISSUED SHARE CAPITAL                                        £131 million
                                            MANAGEMENT FEE                                                1.5%
                                           PERFORMANCE FEE  10% subject to an 8% return with a high watermark*
                    *Please visit Shareholder Information at www.bramdeanalternatives.com for further details.

    Material transactions 
    Changes to share capital

    Participating shares of no par value ("Shares") issued at £1.00 and US$1.00, the number of shares in issue as at 30 June 2008:

 97,751,842  Sterling shares
 65,988,142  US$ shares
         
    In the period, the Company bought back 335,000 Sterling shares for cancellation at an average price of 80.45 pence. 

    The Company's first share conversion opportunity was offered to shareholders on 30 April 2008. The Company reported that it had received
election requests from holders owning 32,055,469 Sterling Shares to switch into U.S Dollar Shares. No election requests were received from
holders of U.S. Dollar Shares to switch their holdings into Sterling Shares. These elections were approved by the Board of Directors on 27
May 2008 and took effect on 28 May 2008.

    Portfolio synopsis

    The Company was 88.8% invested at the end of the second quarter 2008. It has made commitments to sixteen underlying private equity funds
and underlying specialty funds amounting to approximately US$224 million and the total amount that has been drawn-down on the commitments
made is approximately US$59 million. 

    The Company received distributions of US$1.5 million by 30 June 2008.


    MARKET REPORT

    The themes that dominated the last six months were again present across financial markets during the second quarter 2008. Economic data
was generally negative with slowing growth and rising inflation, the markets remained extremely concerned over the strength of financial
institutions and commodity prices continued to be a major focus. The loosening of U.S. and UK monetary policy seen in the first quarter 2008
came under question in the face of a deteriorating inflation outlook.

    Equity markets began the second quarter 2008 by continuing the bear market rally that had begun with the rescue of Bear Stearns in
mid-March 2008. The rally ran out of steam in mid-May 2008 amidst a massive rise in the oil price and continued bad news from the financials
sector. Taking the second quarter 2008 as a whole, the S&P 500 fell 2.4%, the FTSE World fell 2.5% (in U.S. Dollar terms) and the FTSE
All-Share fell 2.4%.

    These numbers mask very sharp falls from the peaks in May (the FTSE World ended the quarter down 10.5% from its high on 19 May, for
example). Emerging markets, which had held up comparatively well during the credit crunch, saw significant weakness on the back of higher
commodity prices. The FTSE World Emerging Market index fell 12.7% from its May 2008 highs. Equity market volatility, which had stabilised as
the market rose at the beginning of the month, returned as the markets went into reverse from the middle of the month. The VIX index, a
measure of market volatility, ended the second quarter 2008 at 23.9, still well below the 32 seen at the time of the Bear Stearns rescue but
well up on a May 2008 low of 16.3.

    Market inflation forecasts altered significantly during the second quarter 2008 and with them, expectations about monetary policy.
Having anticipated further rate cuts, markets began to price in rises in the UK and U.S. (although not the Eurozone).The spectre of 1970s
"stagflation" (albeit with far lower levels of inflation) was increasingly mentioned by commentators and analysts. Housing market data in
the U.S. and UK (especially the latter) were extremely poor.

    The primary driver behind this higher inflationary outlook is, of course, the price of crude oil. Starting the second quarter 2008 at
just over US$100 at the end of March 2008, September 2008 Brent reached US$111 at the end of April 2008, US$128 at the end of May 2008 and
US$139 by the end of the second quarter 2008.  

    Despite the rise in oil prices and weak housing related data, the Dollar remained fairly stable during the second quarter 2008. Against
the Euro, it traded in a relatively tight range between US$1.53 and US$1.58. Against Sterling volatility was similar, trading in a range
between US$1.94 and US$2.00. Over the course of the whole of the second quarter 2008 the major currencies were largely unchanged.

    Capital markets activity remained very subdued. Global Initial Public Offering activity remained at roughly half the level seen in the
same period in 2007. In the whole of the first half of 2008, around 100 planned IPOs were cancelled. These conditions are likely to have an
impact on private equity returns if they continue for a prolonged period.

    In debt markets, the new CDO market remains virtually shut. Total CDO issuance during the quarter was approximately US$25 billion versus
US$165 billion in the second quarter 2007.  

    Corporate default rates have now begun to move up but remain low by historical standards. Data from Moody's for the first half of 2008
show 35 defaults globally of which 20 were in the second quarter 2008. This compares to 19 in total for 2007.  

    After a very poor first quarter 2008, hedge funds performed better during the second quarter. The Credit Suisse/Tremont Index showed a
gain of 2.6% to leave it 0.5% higher for 2008 to date. Returns were good across most strategies in April and May, but poor in June 2008.


    MATERIAL EVENTS

    The Company has made new commitments to two additional private equity and specialty funds. 

    *     Thoma Bravo Fund IX L.P is a private equity fund to which the Company committed US$10 million on 27 March 2008. This fund is a
well-established U.S-based and focused growth equity fund which acquires small to mid-sized services and software companies throughout the
U.S with some bias to the Midwest region.

    *     HIG Bayside Debt & LBO Fund II L.P is a specialty fund to which the Company committed US$15 million on 14 May 2008. This is a
Miami-based distressed debt and growth equity manager investing in, primarily, U.S. small to medium-sized companies.

                                                     PORTFOLIO
                           Top Ten Holdings as at 30 June 2008
 Platinum Grove Contingent Capital Offshore Fund          6.3%
                          Enso Global Equities Fund Ltd.  6.1%
                  York European Opportunities Unit Trust  5.8%
              Greenpark International Investors III L.P.  4.2%
                                           Defender Ltd.  4.2%
     D.E. Shaw Oculus International Members Interest      4.2%
                                Hard Assets 2X Fund Ltd.  3.9%
                             Paulson Advantage Plus Ltd.  3.7%
                   Terra Firma Capital Partners III L.P.  3.6%
                                     Lansdowne UK Equity  3.6%




 Geographical analysis as at 30 June 2008

                            North America  35.9%
                                   Europe  29.8%
                                   Global  29.6%
                           Asia and other   4.7%


        
         Asset Allocation Summary as at 30 June 2008
                      Transitional portfolio1  34.2%
             Strategic Hedge Funds portfolio²  33.7%
               Private Equity Funds portfolio  16.4%
                                     Cash      11.2%
                    Specialty Funds portfolio   4.5%


    1The Company seeks to avoid return dilution caused by holding amounts that are not committed or are committed, but not yet drawn-down,
on both underlying private equity funds and underlying specialty funds by investing such amounts in a range of transitional investments.

    2The part of the Company's portfolio which is managed by RMF Investment Management - Nassau branch.



    Portfolio Commentary

    Shares in the Company have now been trading for one year. The Company's admission to the Official List in July 2007 coincided with
considerable market turbulence which has depressed the share price and this has been compounded by trading illiquidity in the shares. 

    As at 30 June 2008, the Net Asset Values per share were 101.11 pence for the Sterling Share class and US$1.0005 for the U.S Dollar Share
class. This represents a 4.5% increase and 0.2% increase in the respective initial NAVs that were priced at 31 July 2007. At 30 June 2008,
the Sterling Shares traded at a 15.2% discount to the June NAV while the U.S. Dollar Shares traded at a 1.9% premium to NAV. 

    The majority of the Transitional and Strategic Hedge Funds portfolios were subscribed to at the beginning of August 2007. The Strategic
Hedge Funds portfolio is fully invested and holds no cash. A decision was taken during the quarter to redeem the Company's holding in
Abchurch Europe Fund Ltd. ("Abchurch"), a London-based long/short hedge fund that invests primarily in large and mid-cap Western European
equities. The redemption was completed on 1 July 2008, with proceeds received shortly afterwards. The funds have been reinvested in Alydar
Fund Limited, a U.S. long/short equity fund.

    At 30 June 2008, the Strategic Hedge Funds portfolio was invested in 12 funds primarily across Relative Value, Equity Hedged and Global
Macro strategies with smaller allocations to Managed Futures and Event-Driven strategies. Overall the portfolio demonstrated strong
resilience to the market volatility, returning 6.5% gross over the second quarter 2008. 

    The Company continues to make changes to its Transitional portfolio. Redemptions were completed in two long-only managers and one
event-driven manager by 30 March 2008. Since then, and as a reflection of the investment manager's continuing negative view of global
equities market, a decision has been taken to redeem the majority of the Company's holdings in the Transitional portfolio. Two holdings will
be maintained, Aarkad Plc and Defender Ltd., both of which are market neutral, defensive funds and as such are in line with the investment
manager's repositioning of the Transitional portfolio. The Company's holding in Renaissance Institutional Equities Fund International L.P.
is to be switched into that firm's futures fund, Renaissance Institutional Futures Fund International L.P., and this will become effective
on 1 September 2008. This is being implemented as part of the exercise to reduce the Company's exposure to long-only equities in favour of
absolute returns. 

    The investment manager is intending to reinvest the proceeds from the Company's redemptions from Platinum Grove Contingent Capital
Offshore Fund Ltd., Enso Global Equities Fund Ltd., York European Opportunities Unit Trust, York Asian Opportunities Unit Trust, and Oak
Hill Credit Alpha Fund Offshore Ltd. in an equivalent number of funds with a focus on relative value, absolute returns and market neutral
strategies. The investment manager is seeking to reinvest these proceeds on 1 September 2008 and
    1 October 2008 and is currently making its final selection from a shortlist of 19 candidate funds.

    The investment manager will endeavour to select, as far as possible, funds with high liquidity and which offer monthly or quarterly
liquidity without lock-up or early redemption penalties. 

    The Company is continuing with its private equity and specialty funds investment programme. The focus of these investments is upon
increased exposure to investments that should perform well even if the global economy slows significantly as well as  investments that are
likely to be uncorrelated to mainstream financial markets. In that context, Bramdean is making investments in distressed debt, emerging
markets and venture capital funds.

    The Company's returns in April 2008 (1.42% in the Sterling Share class and 1.03% in the U.S. Dollar Share class) benefited from more
stable market conditions after the extreme weakness in financial markets during the first quarter 2008. May 2008 returns (1.91% in the
Sterling Share class and 1.72% in the U.S. Dollar Share class) were reassuringly strong as financial markets began to wobble again. The June
2008 performance (-0.74% for the Sterling Share class and -0.48% for the U.S. Dollar Share class) held up relatively well as financial
markets staged substantial falls from their mid-May 2008 peaks after concerns about the threat of global stagflation took hold. 


    Hedging activity

    The Company's maiden Share conversion, which took effect on 28 May 2008, resulted in an expansion of the U.S. Dollar Share class. The
Company has continued to hedge at the Share class level, maintaining its hedge on the U.S. Dollar exposure of its Sterling Share class. The
U.S. Dollar Share class is unhedged.

    Subsequent to the end of the second quarter 2008, Bramdean's investment committee has decided to shift to a flexible hedge ratio
strategy in order to maximise any potential benefit from currency hedging, while minimising its cost. Bramdean has decided to outsource this
mandate to a specialist currency manager, Mesirow Financial Currency Management, with a dual aim of protecting the portfolio from currency
movements and of generating alpha. The mandate is currently in the process of being implemented.
    Private Equity and Specialty Portfolio

    The portfolio has allocations to two secondaries funds, nine private equity and venture capital funds and five specialty funds.
    The purpose of the two secondaries funds, Coller International Partners V L.P. and Greenpark International Partners V L.P., both 2006
vintages, is to provide vintage year diversification (their strategy is to acquire primarily pre-2006 funds across a range of vintages) to
the Company's private equity portfolio. They are also expected to provide distributions to fund future private equity and specialty fund
draw-downs. These two funds have had seven distributions between them - two from Coller and five from Greenpark, and these account for all
the private equity and speciality distributions to the Company as at 30 June 2008.  

    The Company has the ability to over-commit to private equity funds in order to manage its cash flows efficiently. At 30 June 2008, the
Company's commitments to private equity and specialty funds accounted for 85.3% of its assets, representing an over-commitment of 1.22X,
based on the Company's commitments as a share of total net assets. Any over-commitment may be managed through the Company's cash holdings,
through redemptions from the Transitional portfolio and through the use of gearing. The Company may gear by up to 25% of its net asset
value, but has not employed this facility and had no debt at 30 June 2008. 

    Of the five specialty funds in which the Company is invested, one is 2006 vintage; two funds are 2007 vintage and two are considered to
be 2008 vintage. The role of the Company's Specialty funds is to provide opportunistic diversification from the private equity portfolio.  

    As with the Company's Private Equity portfolio, funds in the Specialty portfolio are at an early stage of their investment cycle. These
funds are typically investing in industries that are less likely to fluctuate with the economic cycle or where they see the opportunity to
take advantage of dislocated financial markets.  

    The Company will continue to seek opportunities which provide investors with exposure to investments that may be uncorrelated to
mainstream financial markets, as well as those that offer the potential to benefit from the continuing difficult economic environment. 

    Transitional Portfolio

    The Company's Transitional portfolio is designed to manage the cash the Company commits to private equity funds but has yet to be
drawn-down. 

    In total, the Transitional portfolio currently consists of eight funds.  During April 2008, the Transitional portfolio returned 2.1%
gross, inclusive of cash. The portfolio's holdings in Enso, Platinum Grove and Oakhill Credit Alpha delivered strong returns during the
month, while York Asian was the only fund in negative territory, returning a small loss. Holdings in defensive and market neutral funds,
Aarkad and Defender, continued to deliver steady monthly returns.

    In May 2008, the portfolio returned 2.4% gross, inclusive of cash. The portfolio's holdings in Enso, Platinum Grove, York Asian and York
European delivered strong returns during the month, while none of the funds had a negative month. Holdings in defensive and market neutral
funds, Aarkad and Defender, continued to deliver steady monthly returns.

    In June 2008, the portfolio returned -1.4% gross, inclusive of cash. Unsurprisingly, the main drag on performance came from the funds
with equity exposures; holdings in market neutral and defensive funds continued to hold up well. 

    For the second quarter 2008 as a whole, the Transitional portfolio returned 3.12% gross, inclusive of cash. The portfolio has returned
-0.5% in 2008 to date.


    Strategic Hedge Funds Portfolio

    For the period 1 April 2008 to 30 June 2008, the portfolio delivered an approximate gross return of 6.5%, leaving performance in 2008 to
date at +8.0%. The portfolio reported positive gains in each month of the second quarter 2008, with a particularly strong gain achieved in
May 2008. All five styles delivered positive returns, and managed futures and global macro were the best performers.  

    Equity Hedged
    A European manager recorded a healthy gain over the second quarter 2008 of 4.48%, benefiting from the temporary improvement in sentiment
in the banking industry at the start of the quarter. The manager was also able to profit from long mining exposure, with positions in Rio
Tinto and BHP Billiton prospering from the renegotiation of its coal contract with China. 

    Another long/short European manager posted an impressive return of 11.73% over the second 2008, with gains stemming from strong stock
picking skills. In addition to a successful thematic bias of long Mining/short Financials, the manager profited from its short exposure to
UK homebuilders, infrastructure companies and consumer-related stocks. 

    The dedicated short seller witnessed a wide dispersion of returns, ending the second quarter 2008 in positive territory of approximately
1.65%. April's rally in the U.S. markets detracted from performance, while the U.S. market's plummet in June 2008 offset previous losses and
led to double-digit returns. The allocation continues to provide excellent diversification in what are testing times for long biased equity
strategies. 


    Relative Value
    The derivative arbitrage manager returned 3.87% over the second quarter 2008. The first two months experienced a tightening of spreads
and a drop in volatility, providing opportunities for the manager within its shorter term bullish option trades. 

    The multi-strategy manager delivered a strong performance of 4.83% over the second quarter 2008. Event-driven sub-strategies were key
return drivers, particularly in the U.S., where its fund profited from a complex transaction structure in Clear Channel and Navtech. 

    Event Driven
    A U.S.-based special situations manager returned 9.35% over the second quarter 2008, driven primarily by its negative outlook on the
financial sector, which has been hard hit in recent months. The manager remains short the sector through both equities and credit, and this
positioning has provided excellent returns so far in 2008.

    The distressed manager posted a small loss of -0.52% for the second quarter 2008. This was caused by significant losses in April 2008,
where the manager was hurt by its defensive positioning amid a strong market rally which led to a compression in credit spreads. May 2008
and June 2008 were positive months, as the manager's short positioning proved successful.

    A European-focused special situations manager returned 4.16% over the period, starting the second quarter 2008 with double-digit
returns. The most significant contribution came from a U.S. railroad theme where rail stocks rallied significantly near the beginning of the
second quarter 2008.The manager's exposure to European exchanges proved damaging as concerns over possible declines in trading volumes, and
thus future profits, led to selling pressure in these stocks.

    Global Macro
    The commodities manager was the strongest performer in the portfolio, with returns of 15.65% over the second quarter 2008. Performance
was driven by long/short positions in natural resources, with natural gas exposure and coal stocks boosting performance.

    The global trader returned 3% over the second quarter 2008.The manager was able to profit from discretionary trading, most notably in
the energy and commodity trading complex as the manager was positioned to take advantage of the steepening of the crude oil curve.



    Managed Futures
    We currently have two short-term traders in this strategy and both of them performed well. Outstanding returns of 14.87% were generated
by a U.S. manager, with large performance contributions from long positions in natural gas and crude oil futures, sectors which have
witnessed considerable price spikes over the second quarter 2008. 

    A systematic short-term trader with a slightly longer-term horizon posted a return of 2.10% over the second quarter 2008.The manager
benefited from ongoing price volatility across the world's largest equity, bond and currency markets.




    Overall portfolio outlook

    Given the negative market data that has come through in recent months and the pessimistic views of many of the Company's underlying
portfolio managers, the Company has taken a defensive portfolio stance. In the first quarter 2008, the Manager had redeemed from long-only
managers Third Avenue Value Equity Offshore Fund Ltd. and Oldfield Partners Overstone Global Equity Fund and from event-driven manager,
Brencourt Enhanced Multi-Strategy International Ltd., while subscribing to dedicated short-term trader Arcas MAC 79 Ltd.

    The Strategic Hedge Funds portfolio maintains a significant long-volatility bias, and Bramdean remains confident it will provide strong
diversification irrespective of market directionality. During the second quarter 2008, the Company redeemed from Abchurch Europe Fund Ltd.
due to poor downside protection in the face of current market conditions and realised some of its gains from its investment in Paulson
Advantage Plus Ltd. The Transitional portfolio is in the process of shifting to a market neutral stance.  

    During the second quarter 2008, the Company submitted a redemption notice for its investment in Enso Global Equities Fund Ltd., an
equities fund. As explained earlier, and subsequent to the end of the second quarter 2008, notices to switch the Company's investment in
Renaissance Technologies' equities fund to its futures fund and to redeem from Platinum Grove Contingent Capital Offshore Fund Ltd., York
European Opportunities Unit Trust, York Asian Opportunities Unit Trust, and Oak Hill Credit Alpha Fund Offshore Ltd. have been submitted.
This transition is designed to generate stable returns while preserving the Company's ability to fund its private equity and specialty
commitments.  

    The Company will continue with its private equity and specialty fund investment programme to diversify over several vintages as a means
of reducing exposure to any one vintage. There is a bias to distressed and uncorrelated assets in the private equity and specialty
portfolios, as the Company believes these investments will perform well in the current environment. 

    The Company will also focus investment towards small-to-mid-cap opportunities versus large-to-mega-cap, as many of the large-cap funds
will have difficulty effectively investing the large pools of capital which they have raised previously. The Company may also introduce more
asset-based lending, long-volatility bias, uncorrelated equity exposure, distressed and other credit opportunities, together with macro and
commodity exposure to further diversify the portfolio.


    By order of the Board, RBC Offshore Fund Managers Ltd, Company Secretary, for and on behalf of Bramdean Alternatives Limited, 8th August
2008.


    Please note that up to date information on the Company, including its monthly NAV and share prices, fact sheets, Annual Report &
Financial Statements, Prospectus and portfolio information can be found at www.bramdeanalternatives.com or via a link from www.bramdean.com.
Capita Registrar's helpline is 0871 664 0300 (Calls cost 10 pence per minute plus network extras).

    Contact Investor Relations on 020 7052 9272, Amanda McCrystal, or [e-mail]


    Registered Office: Canada Court, Upland Road, St. Peter Port, Guernsey, GY1 3QE, Channel Islands.

    This Interim Management Statement has been produced solely to provide additional information to shareholders of Bramdean Alternatives
Ltd ("the Company") to meet the relevant requirements of the U.K. Listing Authority's Disclosure and Transparency Rules. It should not be
relied upon by any other party for any other purpose. The Statement has not been audited.

    Ends.

This information is provided by RNS
The company news service from the London Stock Exchange
 
  END 
 
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