HedgeNordic

The number of Nordic hedge funds with a track record spanning 15 years has now surpassed 30, with AIM Diversified Strategies Fund being the latest addition. The fund, which invests in strategies managed by hedge fund industry heavyweights such as Citadel Advisors, Two Sigma Advisers and D.E. Shaw, has enjoyed stronger performance during the latter half of its journey. “Reaching the 15-year milestone underscores our track record of delivering strong and consistent returns,” says Miikka Hautamaki, CFA, chief executive officer of the Helsinki-based AIM Capital. “Over this time, the core objective of our strategy has remained the same: to provide institutional investors with robust, idiosyncratic sources of return in a relatively liquid fund format, with limited factor exposure and low downside beta to equity and credit markets,” he adds. “Our focus has been on maintaining resilience to navigate market volatility, all while adapting effectively to evolving conditions.”

In mid-2023, Antiloop Hedge wrapped up its journey as a multi-strategy hedge fund, setting the stage for two independent strategies that will soon operate as standalone funds. One year later, Anna Svahn and Lynx co-founder Martin Sandquist have each started managing their respective strategies – Cygnus and Atlas – within a separately managed account (SMA) structure, preparing to launch Luxembourg-domiciled funds later this year. “The SMAs are up and running, and it feels like Groundhog Day as we emerge from hibernation,” jokes Anna Svahn, co-founder of fund boutique Antiloop. Svahn is currently focused on managing her tactical asset allocation strategy, Cygnus, while Martin Sandquist oversees his multi-asset, multi-strategy global macro strategy called Atlas.

CTA is an acronym for commodity trading adviser, because the first futures markets were in commodities. Yet some CTAs nowadays can be dominated by equities, bonds, interest rates and other financial contracts while others still allow potential for commodities to make up as much as half of their risk. Aspect Capital’s risk allocation to commodities in both its flagship CTA and its newer alternative markets product has averaged 35% but has over time contributed anywhere between 10% to just over 50% of the overall portfolio risk. “The trend programs we run are adaptive and reactive as a function of the opportunity set. Their drivers are always very varied, and this is particularly evident across the universe of commodities that CTAs like us can access,” says Razvan Remsing, CFA, Director of Investment Solutions.

A month after expanding its portfolio management team with a fourth portfolio manager, Rhenman & Partners Asset Management is now strengthening its client-facing team. The healthcare-focused asset manager has appointed Mattias Hagen as Investor Relations Director. “It is very exciting and inspiring to join Rhenman & Partners. I see them as one of the Nordic region’s strongest niche asset managers,” Mattias Hagen comments on joining Rhenman & Partners. “I look forward to being a part of the continued development of the firm.” His recruitment is one of several key hires at Rhenman & Partners this year. “We are very pleased that Mattias is joining Rhenman & Partners. His broad skill set and experience make him a strong addition to our organization,” says Teresa Isele ♠️, CEO of Rhenman & Partners. Mattias will be an important part of our contacts with investors, both in Sweden and internationally.”

We just wrapped up the HedgeNordic round table discussion on operations and trading with the kind support of MSCI Inc., IG Prime and Enfusion. We got vivid, candid and insightful views on the operations from Swedish (Hedge) Fund managers by Stuart Abel, Joakim Agerback, Martin Rudling, Oscar Severinsson, Patrik Safvenblad, Martin Redgård, Joakim Lundmark, Daniel Mackey, and expertise from Peter Chan, Richard Fenton and Stephen Roberts, CFA. Thanks to Andi Woolass for leading us through the discussion. Watch out for the writeup on HedgeNordic.com.

Institutional investors, including those from the Nordic region, have steadily increased their allocations to private market asset classes such as private equity, private debt, real estate, and infrastructure. Despite a general weakening in appetite for alternative investments in a higher interest rate environment, pension and institutional clients continue to explore private assets. This interest is driven not only by the long-term outperformance of private assets compared to public equivalents but also by the broader investable universe they offer, as noted by Christoph Junge, CAIA, Head of Alternatives at Danish pension provider Velliv, during an interview in May this year. Every asset class, including those in private markets, plays a distinct and defining role in the broader portfolio. “Each of these asset classes has its own distinct role in our portfolio allocation,” reiterates Junge. The primary role of both private equity and private credit in Velliv’s portfolio is to outperform their liquid counterparts. “In private equity, our goal is to achieve the highest possible returns and outperform listed markets over the long run,” explains Junge. Investing in real assets serves a distinct purpose. “With infrastructure and timberland investments, we are aiming for stable returns and inflation protection,” points out Junge. Real assets expose investors to a different set of risk premiums.

The fund-of-funds concept can offer benefits like diversification, professional management, and multi-strategy exposure. Despite these advantages, the fund-of-funds business has faced significant challenges in recent years, primarily due to fee pressure, along with evolving investor preferences and increasing competition. Yet, a new player in the Nordics, Xcent Multi-Strategy, has recently entered the market with a fund of funds. “This multi-strategy fund invests in hedge funds – better described as alternative funds – along with long-only funds and fixed-income funds,” says Per Mårdbrant, who launched Xcent Multi-Strategy at the beginning of September under the Alfakraft Fonder umbrella.

Tidan Fund, Tidan Capital’s hedge fund focused on capturing capital structure opportunities, is approaching its third anniversary this October with strong momentum. The fund has achieved back-to-back record months, including a 4.7 percent gain in August, which the team describes as “one amazing roller coaster ride for the history books.” Year-to-date through the end of August, Tidan Fund has advanced 21 percent. Launched in October 2021, Tidan Fund employs a capital structure relative value strategy similar to that used at Brummer-backed Carve, where Tidan Capital’s CIO and co-founder, Michael Falken, was a portfolio manager. Although Carve was shut down in mid-2020 partly due to “massive central bank interventions that have broken down the normal relationships between equity and credit,” Tidan Fund’s recent performance signals a normalization of these relationships. “The last 16 months have seen a substantial increase in opportunities, mostly thanks to more dispersion in credit markets, particularly for companies experiencing stress related to their capital structure, structural issues, or competitive industry pressures,” confirms Michael Falken.

As Carnegie Credit Edge comes to a close, Emil Nordström, who managed the fund’s derivatives strategy, is now steering a new initiative at Carnegie Fonder. Nordström has assumed the role of lead portfolio manager for Carnegie Global Plus, a new derivatives-based equity fund that aims to replicate the success of the AP7 Equity Fund. The fund is designed to maintain 140 percent exposure to the global equity market using derivatives.

Trend-following managers had a tough time navigating markets in August, as evidenced by the 4.5 percent decline in the SG Trend Index. However, Mandatum Asset Management’s trend-following managed futures strategy stood out as one of the stronger performers in the Nordics, delivering a 4.8 percent gain for the month. Most trend-following CTAs held long positions in both bonds and equities leading up to the early August sell-off, and Mandatum Managed Futures Fund was no exception. While this positioning led to equity losses that were partially offset by gains in long bond positions, Mandatum’s fund distinguished itself by capturing profits not only in bonds but also in equities (and currencies). During the first three days of August, global equities dropped by 6.7 percent, but Mandatum’s fund still managed to deliver a positive one percent return. Ville Rantanen, Portfolio Manager for Mandatum Managed Futures Fund, credits this performance to the use of meta-models designed to override traditional trend models during periods of heightened risk of strong adverse price movements.