Swiss Helvetia Fund, Inc.

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

 

 

FORM N-Q

 

 

QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED

MANAGEMENT INVESTMENT COMPANY

Investment Company Act file number 811-05128

 

 

THE SWISS HELVETIA FUND, INC.

 

 

1270 Avenue of the Americas, Suite 400

New York, New York 10020

1-888-SWISS-00

Rodolphe E. Hottinger, President

Hottinger et Cie

3 Place des Bergues

C.P. 395

CH-1201 Geneva

Switzerland

 

 

Date of fiscal year end: December 31

Date of reporting period: July 1, 2008 - September 30, 2008

 

 

 

Item 1. Schedule of Investments.

 

THE SWISS HELVETIA FUND, INC.

 

Schedule of Investments (Unaudited)   September 30, 2008

 

No. of
Shares		   Security   Fair Value   Percent
of Net
Assets		  
Common Stocks — 83.51%    
Banks — 2.75%    
20,407   Bank Sarasin & Cie AG
Registered Shares		   $ 778,060   0.16 %
  Offers private banking, asset management, investment advisory, and institutional banking services.
(Cost $764,604)		    
172,500   Credit Suisse Group1
Registered Shares		     7,676,923   1.52 %
  A global diversified financial service company with significant activity in private banking, investment banking, asset management and insurance service.
(Cost $4,523,886)		    
329,075   UBS AG1,2
Registered Shares		     5,417,814   1.07 %
  A global diversified financial service company with significant activity in private banking, investment banking, and asset management.
(Cost $2,242,403)		    
             
      13,872,797   2.75 %
Basic Resources — 0.58%    
26,236   Precious Woods Holding AG2
Registered Shares		     1,790,015   0.35 %
  Through subsidiaries, manages tropical forests using ecologically sustainable forest management methods. Harvests tropical trees and processes them into lumber. (Cost $2,107,307)    
No. of
Shares		   Security   Fair Value   Percent
of Net
Assets		  
 
Basic Resources — (continued)  
75,000   UMS Schweizerische Metallwerke Holding AG2
Bearer Shares		   $ 1,150,501   0.23 %
  Produces profiles and large dimension rods for electrical engineering, mechanical engineering, and construction companies, lead-free brass wire for batteries, billets and small diameter wire and rods for the consumer goods and electronics industries.
(Cost $1,655,850)		    
             
      2,940,516   0.58 %
Biotechnology — 9.96%    
124,655   Actelion, Ltd.1,2
Registered Shares		     6,348,094   1.26 %
  Biotechnology company that develops and markets synthetic small-molecule drugs against diseases related to the endothelium.
(Cost $1,815,945)		    
314,860   Addex Pharmaceuticals, Ltd.2
Registered Shares		     13,198,145   2.61 %
  Bio-pharmaceutical company that discovers, develops, and markets therapeutic compounds for the treatment of addiction and other neuropsychiatric conditions.
(Cost $16,016,264)		    
10,000   Bachem Holding AG
Registered Shares		     789,298   0.16 %
  Manufactures ingredients for pharmaceuticals, generic drugs, and research supplies.
(Cost $833,329)		    

THE SWISS HELVETIA FUND, INC.

 

Schedule of Investments (Unaudited)

(continued)

   September 30, 2008

 

No. of
Shares		   Security   Fair Value   Percent
of Net
Assets		  
Common Stocks — (continued)    
Biotechnology — (continued)  
131,250   Basilea Pharmaceutica1,2
Registered Shares		   $ 19,314,381   3.83 %
  Conducts research into the development of drugs for the treatment of infectious diseases and dermatological problems.
(Cost $18,117,602)		    
10,000   Santhera Pharmaceuticals2 Registered Shares     397,324   0.08 %
  Drug discovery and development company.
(Cost $948,284)		    
81,903   Speedel Holding AG2
Registered Shares		     10,219,157   2.02 %
  Researches and develops therapies for cardiovascular and metabolic diseases.
(Cost $10,812,921)		    
             
      50,266,399   9.96 %
Chemicals — 4.94%    
117,931   Syngenta AG1
Registered Shares		     24,948,257   4.94 %
  Produces herbicides, insecticides and fungicides, and seeds for field crops, vegetables, and flowers.
(Cost $12,466,047)		    
             
      24,948,257   4.94 %
Construction & Materials — 0.20%    
1,141   Belimo Holding AG
Registered Shares		     1,007,438   0.20 %
  World market leader in damper and volume control actuators for ventilation and air-conditioning equipment.
(Cost $222,726)		    
             
      1,007,438   0.20 %
No. of
Shares		   Security   Fair Value   Percent
of Net
Assets		  
 
Food & Beverages — 18.88%    
2,690   Barry Callebaut AG
Registered Shares		   $ 1,611,001   0.32 %
  Manufactures cocoa, chocolate, and confectionary products.
(Cost $1,374,087)		    
290   Lindt & Sprungli AG
Registered Shares		     7,823,857   1.55 %
  Major manufacturer of premium Swiss chocolates.
(Cost $1,141,585)		    
1,997,000   Nestle SA1
Registered Shares		     85,846,511   17.01 %
  Largest food and beverage processing company in the world.
(Cost $27,020,121)		    
             
      95,281,369   18.88 %
Industrial Goods & Services — 2.07%    
446,457   ABB, Ltd.
Registered Shares		     8,409,518   1.67 %
  The holding company for ABB Group, which is one of the largest electrical engineering firms in the world.
(Cost $4,789,336)		    
6,440   Inficon Holding AG
Registered Shares		     712,205   0.14 %
  Manufactures and markets vacuum instruments used to monitor and control production processes. Manufactures on-site chemical detection and monitoring system.
(Cost $581,616)		    

THE SWISS HELVETIA FUND, INC.

 

Schedule of Investments (Unaudited) 

(continued)

   September 30, 2008

 

No. of
Shares		   Security   Fair Value   Percent
of Net
Assets		  
Common Stocks — (continued)  
Industrial Goods & Services — (continued)  
11,648   Komax Holding AG
Registered Shares		   $ 1,297,512   0.26 %
  Manufactures wire processing machines. Produces machines for cutting and tripping round and flat wire, crimping and insertion machines for processing single wires and equipment for processing wire harnesses.
(Cost $1,789,079)		    
             
      10,419,235   2.07 %
Insurance — 7.71%    
28,000   Baloise Holding AG
Registered Shares		     1,877,904   0.37 %
  Offers group and individual life, health, accident, liability, property and transportation insurance
(Cost $2,095,588)		    
180,000   Swiss Re
Registered Shares		     9,744,481   1.93 %
  Offers reinsurance and insurance linked financial market products
(Cost $11,038,198)		    
100,000   Zurich Financial Services AG
Registered Shares		     27,290,970   5.41 %
  Offers property, accident, health, automobile, liability, financial risk and life insurance and retirement products.
(Cost $26,057,885)		    
             
      38,913,355   7.71 %
No. of
Shares		   Security   Fair Value   Percent
of Net
Assets		  
 
Medical Technology — 0.98%    
150,000   Nobel Biocare Holding AG
Registered Shares		   $ 4,957,860   0.98 %
  Develops and produces dental implants and dental prosthetics
(Cost $5,265,016)		    
             
      4,957,860   0.98 %
Personal & Household Goods — 0.15%    
14,972   Schulthess Group
Registered Shares		     754,442   0.15 %
  Develops, manufactures, and sells household appliances and heating equipment.
(Cost $1,200,040)		    
             
      754,442   0.15 %
Pharmaceuticals — 21.46%    
891,300   Novartis AG1
Registered Shares		     46,542,355   9.23 %
  One of the leading manufacturers of branded and generic pharmaceutical products. Manufactures nutrition products.
(Cost $14,613,905)		    
396,600   Roche Holding AG1
Non-voting equity securities		     61,722,809   12.23 %
  Worldwide pharmaceutical company.
(Cost $12,550,849)		    
             
      108,265,164   21.46 %

THE SWISS HELVETIA FUND, INC.

 

Schedule of Investments (Unaudited)

(continued)

   September 30, 2008

 

No. of
Shares		   Security   Fair
Value		   Percent
of Net
Assets		  
Common Stocks — (continued)  
Real Estate & Infrastructure — 0.15%    
12,000   Orascom Development Holding AG2   $ 758,261   0.15 %
  Through its subsidiary, offers real estate, infrastructure, and leisure services.
(Cost $1,925,937)		    
             
      758,261   0.15 %
Retailers — 1.72%    
17,550   Galenica AG1
Registered Shares		     6,229,565   1.24 %
  Manufactures and distributes prescription and over-the-counter drugs, toiletries and hygiene products.
(Cost $2,147,767)		    
1,100   Jelmoli Holding AG
Bearer Shares		     2,431,037   0.48 %
  Owns and operates department and retail stores and provides mail-order catalog and real estate leasing services.
(Cost $1,779,341)		    
             
      8,660,602   1.72 %
Technology — 1.63%    
441,200   Temenos Group AG2
Registered Shares		     8,223,929   1.63 %
 

Provides integrated software for the banking sector.

(Cost $8,486,650)

    
             
      8,223,929   1.63 %
No. of
Shares		   Security   Fair Value   Percent
of Net
Assets		  
 
Utility Suppliers — 10.33%    
35,023   Atel Holding, Ltd.   $ 17,882,424   3.54 %
 

Generates, transmits and distributes electricity throughout Europe.

(Cost $16,949,030)

    
100,817   BKW FMB Energie AG
Registered Shares		     10,340,205   2.05 %
 

Produces electricity using nuclear, hydroelectric, solar, biomass and wind energy.

(Cost $5,171,057)

    
28,095   Centralschweizerische Kraftwerke AG
Registered Shares		     13,330,247   2.64 %
 

Supplies electric power, operates and maintains distribution network facilities, constructs and installs equipment, and offers consulting services to its clients.

(Cost $8,416,552)

    
1,500   Electrizitaets-Gesellschaft Laufenburg AG
Bearer Shares		     1,672,241   0.33 %
 

Operates nuclear and hydroelectric generating plants and sells excess power throughout Europe.

(Cost $1,970,882)

    
5,000   Raetia Energie AG
Participation Certificate		     1,863,991   0.37 %
 

Generates and distributes electric power from its own hydroelectric stations, as well as from outside nuclear power suppliers of electric power.

(Cost $2,035,541)

    

THE SWISS HELVETIA FUND, INC.

 

Schedule of Investments (Unaudited)

(continued)

   September 30, 2008

 

No. of
Shares		   Security   Fair Value   Percent
of Net
Assets		  
Common Stocks — (continued)  
Utility Suppliers — (continued)  
3,110  

Romande Energie Holding SA

Registered Shares

   $ 7,045,173   1.40 %
 

Distributes electricity in the Canton of Vaud, provides repair and other electrical services to its customers.

(Cost $7,533,642)

    
             
      52,134,281   10.33 %
 

Total Common Stocks

(Cost $238,460,872)*

     421,403,905   83.51 %
Private Equity Investments3 — 0.84%    
  Aravis Venture II – Limited Partnership (471,900 Euro)2,3,4     662,855   0.13 %
  Zurmont Madison Private Equity, Limited Partnership
(3,996,768 CHF)2,3,4		     3,564,564   0.71 %
             
 

Total Private Equity Investments

(Cost $4,467,945)

     4,227,419   0.84 %
Call Warrants — 0.09%    
1,250,000   Galenica AG Expires
12/19/08 at 400.00 CHF		     167,224   0.03 %
5,000,000   Novartis AG Expires
10/17/08 at 60.00 CHF		     312,152   0.06 %
             
 

Total Call Warrants

(Cost $1,642,807)

     479,376   0.09 %
No. of
Shares		   Security   Fair Value   Percent
of Net
Assets		  
 
Put Warrants — 2.04%    
10,870,000   SMIM Price Index Expires 12/19/08 at 250.00 CHF   $ 3,296,143   0.66 %
2,200,000   SMIM Price Index Expires 12/19/08 at 300.00 CHF     706,354   0.14 %
12,000,000   Swiss Leader Index Expires 01/16/09 at 20.00 CHF     4,494,983   0.89 %
1,600,000   Swiss Re Expires 12/19/08 at 55.00 CHF     499,443   0.10 %
2,700,000   Syngenta AG Expires 12/19/08 at 241.00 CHF     1,011,371   0.20 %
3,000,000   Zurich Financial Services AG Expires 12/19/08 at 250.00 CHF     267,559   0.05 %
             
 

Total Put Warrants

(Cost $8,856,178)

     10,275,853   2.04 %
 

Total Investments

(Cost $253,427,802)*

     436,386,553   86.48 %
  Other Assets less Other Liabilities, net     68,217,946   13.52 %
             
  Net Assets   $ 504,604,499   100.0 %
             

 

 

1

One of the ten largest portfolio holdings.

 

2

Non-income producing security.

 

3

Private equity investments are priced at fair value as determined by the Board’s valuation committee. At the end of the period, the value of these securities amounted to $4,227,419 or 0.84% of net assets.

 

4

Restricted security not registered under the Securities Act of 1933 other than Rule 144A securities. At the end of the period the value of these securities amounted to $4,227,419 or 0.84% of net assets. Additional information on restricted securities is as follows:

THE SWISS HELVETIA FUND, INC.

 

Schedule of Investments (Unaudited)

(continued)

   September 30, 2008

 

Security

  

Acquisition Date

  

Acquisition Cost

  

Acquisition Value
per unit

Aravis Venture II, LP   July 31, 2007   $ 205,328   $ 1.00
Aravis Venture II, LP   February 21, 2008     399,343     1.00
Aravis Venture II, LP   August 4, 2008     81,013     1.00
Zurmont Madison Private Equity, LP   September 13, 2007     123,646     1.00
Zurmont Madison Private Equity, LP   December 17, 2007     109,210     1.00
Zurmont Madison Private Equity, LP   February 28, 2008     3,225,332     1.00
Zurmont Madison Private Equity, LP   April 14, 2008     169,431     1.00
Zurmont Madison Private Equity, LP   June 26, 2008     154,642     1.00
         
    $ 4,467,945  
         

 

* Cost for Federal income tax purposes is $253,427,802 and net unrealized appreciation (depreciation) consists of:

 

Gross Unrealized Appreciation

    $ 194,951,403  

Gross Unrealized Depreciation

      (11,992,652 )
        

Net Unrealized Appreciation

    $ 182,958,751  
        

In September 2006, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 157, “Fair Value Measurements” (“SFAS 157”.) This standard establishes a single authoritative definition of fair value, sets out a framework for measuring fair value, and requires additional disclosures about fair value measurements. SFAS 157 applies to fair value measurements already required or permitted by existing standards. SFAS 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. The changes to current GAAP from the application of this Statement relate to the definition of fair value, the methods used to measure fair value, and the expanded disclosures about fair value measurements.

One key component of the implementation of SFAS 157 includes the development of a three-tier fair value hierarchy. The basis of the tiers is dependant upon the various “inputs” used to determine the value of the Fund’s investments. These inputs are summarized in the three broad levels listed below:

Level 1—quoted prices in active markets for identical assets

Level 2—other significant inputs (including quoted prices of similar securities, interest rates, prepayments speeds, credit risk, etc.)

Level 3—significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of investments)

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.

The following is a summary of the inputs used to value the Fund’s net assets as of September 30, 2008:

 

Valuation Inputs

   

Investments
in Securities

Level 1—Quoted Prices

    $ 421,403,905

Level 2—Other Significant Observable Inputs

      10,755,229

Level 3—Significant Unobservable

      4,227,419
      

Total Investments

    $ 436,386,553
      

THE SWISS HELVETIA FUND, INC.

 

Schedule of Investments (Unaudited)

(concluded)

   September 30, 2008

 

The following is a reconciliation of Level 3 assets (at either the beginning or the ending of the period) for which significant unobservable inputs were used to determine fair value.

 

     

Investments
in Securities

  

Balance as of 12/31/2007

    $ 1,230,949  

Accrued Accretion / (Amortization)

      —  

Change in Unrealized Appreciation / (Depreciation)

      (176,868 )

Net Purchase / (Sales)

      3,173,338  

Transfers In / (Out) of Level 3

      —  
        

Balance as of 9/30/2008

    $ 4,227,419  
        

THE PORTFOLIO OF INVESTMENTS SHOULD BE READ IN CONJUNCTION WITH THE FINANCIAL STATEMENTS AND NOTES TO FINANCIAL STATEMENTS WHICH ARE INCLUDED IN THE FUND’S AUDITED ANNUAL REPORT OR SEMI-ANNUAL REPORT. THESE REPORTS INCLUDE ADDITIONAL INFORMATION ABOUT THE FUND’S SECURITY VALUATION POLICIES AND ABOUT CERTAIN SECURITY TYPES INVESTED IN BY THE FUND.

Item 2. Controls and Procedures.

 

(a) The registrant’s President and Treasurer have concluded, based on their evaluation of the registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940 (the “Act”)) as conducted within 90 days of the filing date of this report, that these disclosure controls and procedures are adequately designed and are operating effectively to ensure that information required to be disclosed by the registrant on Form N-Q is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms.

 

(b) There were no changes in the registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the Act) that occurred during the registrant’s most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, the registrant’s internal control over financial reporting.

Item 3. Exhibits.

Certifications pursuant to Rule 30a-2(a) are attached hereto.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

(Registrant)  

The Swiss Helvetia Fund, Inc.

   
By (Signature and Title)*  

/s/    Rodolphe E. Hottinger

   
 

Rodolphe E. Hottinger, Chief Executive Officer

 

   

Date 11/25/08

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

 

By (Signature and Title)*  

/s/    Rodolphe E. Hottinger

   
 

Rodolphe E. Hottinger, Chief Executive Officer

 

   

Date 11/25/08

By (Signature and Title)*  

/s/    Rudolf Millisits

   
 

Rudolf Millisits, Chief Financial Officer

 

   

Date 11/26/08