Stockholm (HedgeNordic) – Hedge funds are notorious for being secretive, but there is little doubt that the industry has entered a new era of transparency. And some hedge fund vehicles have successfully responded to greater demands for transparency. For instance, Swedish hedge fund manager Origo Capital recently launched Insight, a new informative publication that gives investors access to the fund manager’s thoughts and strategy.
The new publication is intended to provide in-depth information regarding the development of their long-short equity hedge fund Origo Quest 1, as well as offer insights into the fund’s investment strategy and portfolio holdings. The publication serves as an addendum to the fund’s half-year reports, annual reports, and monthly letters.
In the inaugural Insight publication, Origo investment manager Stefan Roos and newly-hired investment analyst Carl Rydin discussed the year-to-date performance of their fund in 2017, provided detailed commentary on some holdings, as well as shared their thoughts on opportunities and challenges lying ahead. The small-cap specialist gained 3.7% year-to-date through September 21, thanks to strong performance enjoyed in the first three weeks of September. The fund was nearly flat in the first eight months of 2017.
When asked to describe Origo Quest’s investment strategy and pinpoint unique features in the investment process, Stefan said the following:
“The fund’s strategy is equity long/short with a focus on Nordic small-cap companies. We invest with a long-term view and prefer to engage closely with the companies in our portfolio. We believe we are unique in many ways. We have a company culture where we only specialize in Nordic small-cap companies when most fund companies have a wider and less narrow focus. We choose to have a concentrated portfolio when most funds have a relatively large number of holdings in their portfolios. Our core focus is within very small companies with a market cap up to SEK 10 billion, as oppose to “small-caps” of SEK 50-75 billion. We also try to stay very close to our portfolio companies and have an active dialogue with the Board, management and other owners. Our investment philosophy and approach is closer to a private equity mindset than a traditional mutual fund or hedge fund.”
Stefan and his team at Origo are not satisfied with the low single-digit return achieved thus far in 2017, as the figure stands below their yearly target of 10-15%. Stefan acknowledged that both the risk-level and correlation in the market have been limited, which could justify the below-target return. “Several of our core holdings reported somewhat weak Q1 results and announced some negative news which led to weaker share price performance. Given our knowledge of these companies, we determined these issues were of short-term nature and decided to increase our positions in some of our long positions. After Q2, we have seen most of our portfolio companies delivering good results and heading in the right direction again,” Stefan said about the fund’s performance year-to-date.
To view the entire Insight publication released by Origo, please click here: