Stockholm (HedgeNordic) – So, it has happened, the dice have fallen and the estimates released by Brummer & Partners today indicate a flat month of December means Brummer Multi-Strategy (BMS) has logged in its first negative calendar year of trading results. The fund had, up until 2016, managed to keep an impressive clean sheet of only positive annual results since inception in 2002.

Big news? Not really. Noteworthy – absolutely! But more than anything disappointing surely for some investors and maybe more, disgruntled faces to be seen around Normamlstorg in Stockholm, where Brummer & Partners resides. Likely though, some mischievous grins in the neighborhood, taking satisfaction that the almighty giant they have been competing with for so long in a Don Quixote like challenge appears to be shaking.

A clear indication investors are not amused comes from assets under management BMS has available to distribute to underlying strategies. The fund peaked in July 2105, with a reported AuM of 55.2 Billion SEK, approximetly 6 BUSD while the latest figures available from November 2016 show a drop in AuM to 41.5 BSEK, or 4.5 BUSD. Nearly a quarter of assets went out the door.

The 2016 result shall not be seen as an isolated event and certainly any investment deserves more thorough analysis over a much longer timespam. What does need to be highlighted though is out of the twelve calendar months 2016, only three (June, July, September) clocked in black numbers, while nine were negative – five of which consecutive months from January through to May. The fund from there actually managed to claw back ground from -3.8% after that drought period to its current indicative -1.3% return. Moreover, 2014 and 2015 were the two worst years in BMS´ fourteen-year track record, prior to 2016 adding to the pain.

In an attempt to steer against that trend, BMS had aggressively reshifted its portfolio over the pastmonths to an extent it became hard to keep up with. BMS was deinvesting from underlying managers while adding new teams, such as Talarim during the year. The maybe most discussed redemptions were the double whammy of  Zenit and Canosa in February 2016. Zenit was Sweden’s first hedge fund, and the first fund in the Brummer & Partners family of funds while Canosa was one of BMS most recent additions at the time. „BMS decision to redeem their entire investment in Zenit and Canosa is based on general findings, where we can observe weak marginal contribution to BMS returns in recent years“, says BMS manager Klaus Jäntti in a statement at the time, underlining those efforts

On the brighter side, within the family of funds, Manticore finished the year up 4.9% (est.), Nektar after a strong December up 3.5% (est.) and Observatory up 6.4% (est.)

No estimates are available yet on the Nordic Hedge Index (NHX) for the month of December, and thus the full year. By end November however, while all single manager strategy sub-indices were positive YTD, NHX FoF, of which BMS is a constituent, was the only negative sub index, down by a whopping -1.6% for the year, the worst since 2008 when NHX FoF was under water by 8.7%. (in which year BMS yielded 7.7%)

Constituents of NHX FoF sub index can be reviewed here: NHX FoF

 

Picture: © Jo ritchy — shutterstock.com

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Kamran Ghalitschi

Kamran has been working in the financial industry since 1994 and has specialized on client relations and marketing. Having worked with retail clients in asset management and brokerage the first ten years of his career for major European banks, he joined a CTA / Managed Futures fund with 1,5 Billion USD under management where he was responsible for sales, client relations and operations in the BeNeLux and Nordic countries. Kamran joined a multi-family office managing their own fund of hedgefunds with 400 million USD AuM in 2009. Kamran has worked and lived in Vienna, Frankfurt, Amsterdam and Stockholm. Born in 1974, Kamran today again lives in Vienna, Austria.

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