Given recent news, it seems timely to provide an update to our previous note on Elders Hybrids (ASX:ELDPA) that we published on the 3rd of July 2015 <a href="http://aavof.com/elders-hybrid-securities-eldpa/" rel="nofollow noopener" target="_blank" data-event-type="click" data-event="link_click">(VIEW LINK)</a>. When Arowana Australian Value Opportunities Fund (AAVOF) (ASX:AWQ) started its life as a Listed Investment Company in January 2015, the first security it bought was the Elders Hybrids. In many ways this appeared a strange purchase. Elders had stopped paying dividends on its Hybrids in 2009. Some people even referred to the Hybrids as “perpetual zero coupon bonds”, implying holders would never receive a dividend and never get their money back. What attracted us to the Elders Hybrids in 2015 was their asymmetric payoff profile; basically we thought there was a lot more upside risk than downside risk.