- Advertisement -
- Advertisement -

Related

Merrant: The Market Neutral Multi-Manager

Industry Report

- Advertisement -

Stockholm (HedgeNordic) -Merrant Alpha Select is a Swedish fund of hedge funds co-managed by Ulf Sedig and Rolf Hagekrans. The fund focuses entirely on identifying and allocating to market neutral hedge fund strategies with the objective of generating consistent returns that are uncorrelated to other asset classes, including hedge funds. So far, the approach has been highly successful! ”We have been running this strategy for more than six years now and managed to navigate all sorts of difficult market environments. Since inception, the fund has only had five negative months, with risk-adjusted returns that have consistently beaten benchmarks. To me this is evidence enough that our approach works,” as Rolf Hagekrans summarizes the strong pedigree of Merrant Alpha Select.

Merrant Alpha Select was launched in August 2009 and has shown an exceptional consistency in returns ever since. The fund is yet to report a losing year, and has generated annualized returns of 5.8 %. Volatility levels have been subdued, and the fund’s annualized volatility amounts to 1.6%. Not only has the fund performed well, it has also shown low correlation to equities, which Hagekrans sees as one of the main reasons to consider a market neutral strategy. ”One of the main advantages of the market neutral strategy is that it has a greater emphasis on acting as a true hedge to market volatility and therefore shows resilience in times of equity market distress”, Hagekrans explains, continuing: ”Market neutral funds seek to earn a positive total return over a full market cycle regardless of market conditions or general market direction. A diversified portfolio that holds a market neutral component is better equipped to provide diversified returns and improve risk-adjusted returns.”

Merrant´s concentrated portfolio currently consists of 10 different single manager market neutral funds, with the bulk of the risk being in market neutral equity strategies, the most widely used strategy in the market neutral space. As of late, Merrant has reduced the risk to fixed income relative value strategies, as the manager believes the market opportunities are simply not there. ”We have cut back significantly on fixed income allocations. The current market environment makes it hard for these strategies to generate any meaningful returns, and we believe the risk to the downside is higher than it used to be,” Hagekrans explains.

The active management of the portfolio is an important aspect in Merrant´s approach. The fact that the portfolio consists of multiple funds with inherently different styles and characteristics is a way to diversify risk, he says. Merrants fund selection process is highly structured and lives by a number of core beliefs that the portfolio managers believe explain why the funds have been recognized as having some of the highest risk adjusted returns in the industry.

To read the whole interview in the HedgeNordic Special Report on market neutral strategies, please click here: Market Neutral Strategies 

Subscribe to HedgeBrev, HedgeNordic’s weekly newsletter, and never miss the latest news!

Our newsletter is sent once a week, every Friday.

Jonathan Furelid
Jonathan Furelid
Jonathan Furelid is editor and hedge fund analyst at HedgeNordic. Having a background allocating institutional portfolios of systematic strategies at CTA-specialist RPM Risk & Portfolio Management, Mr. Furelid’s focus areas include sytematic macro and CTAs. Jonathan can be reached at: jonathan@hedgenordic.com

Latest Articles

Rising Adoption of Quantitative Investment Strategies Among Nordic Investors

From a high-level perspective, there is a clear trend of increasing adoption of quantitative investment strategies (QIS) among Nordic institutional investors, either through the...

EU Plans Stress Test for Hedge Funds and Non-Bank Firms

European regulators are planning a stress test to identify vulnerabilities beyond the traditional banking sector, focusing on less regulated entities such as hedge funds,...

ALCUR Fonder Continues Hiring Spree

Following two earlier additions this year, ALCUR Fonder continues to expand its portfolio management team at a notable pace. The Stockholm-based hedge fund boutique...

Nordic Private Markets Modernize with Data-Centric Trade Lifecycle Automation

By Anders Stengaard Jensen at Indus Valley Partner: In recent years, asset managers in Nordic countries have accelerated efforts to modernize trade operations, particularly...

Norwegian Hedge Fund Industry Sees Major Boost with New Launch

The Swedish and Danish hedge fund industries remain closely matched in size, with Denmark recently edging ahead of Sweden. While still less than half...

Atlant Funds Hold Up in May Despite Mistimed Market Call

Macroeconomic and market forecasts are notoriously difficult, even for experienced hedge fund managers. What matters more than being right, however, is ensuring that incorrect...

Allocator Interviews

In-Depth: High Yield

Voices

Request for Proposal

- Advertisement -
HedgeNordic
Privacy Overview

This website uses cookies so that we can provide you with the best user experience possible. Cookie information is stored in your browser and performs functions such as recognising you when you return to our website and helping our team to understand which sections of the website you find most interesting and useful.