Stockholm (HedgeNordic) – Absolute return fund Adrigo Hedge is moving from monthly to daily pricing and liquidity starting from the first day of November, according to a press release by Stockholm-based asset manager Adrigo Asset Management AB. The move is part of a wider industry trend in response to increased investor demand for more liquid investment products.
Following the approval of the Swedish Financial Supervisory Authority (FSA), investors will soon be able to buy and sell fund units in Adrigo Hedge on a daily basis instead of monthly. The change will also affect the fund’s performance fee calculation, which will accrue daily based on the cumulative net excess return and will be paid to the fund on the last day of each month. Under both the previous and updated fund rules, the performance fee calculation is subject to a benchmark hurdle based on a reference benchmark rate (30-day STIBOR) in addition to the high-water-mark. The benchmark hurdle is applied to the high-water-market, which means the adjusted high-water-market must be surpassed before performance fees accrue.
Under the new fund rules approved by the Swedish FSA, investors willing to invest in Adrigo Hedge will no longer be required to make a minimum investment amounting to SEK 100,000. Previously investors had to make a minimum initial investment of SEK 100,000 and make investments of SEK 10,000 on each additional subscription. According to the press release, the changes are made to improve liquidity for investors, as well as facilitate the possibility of investors to transact units in Adrigo Hedge through trading platforms.
“We have seen a lot of interest among our investors for daily liquidity and we are pleased to have now finalized arrangements for this change,” Stefan Gavelin (pictured), the chief executive officer of Adrigo Asset Management told HedgeNordic. “Adrigo Hedge is an established low-risk hedge fund with a long successful track record and with this change we hope to also give investors the opportunity to invest through platforms,” he added.
The move towards offering daily liquidity is facilitated by the fund’s focus on larger and more liquid companies in Nordic equity markets. As a result, the investment strategy will not undergo any amendments following the abovementioned changes. Adrigo Hedge, which oversees SEK 2.39 billion in assets under management as of the end of August, is a long/short equity fund managed by Göran Tornée, Daniel Åhlin and Sven Thorén. The portfolio management team puts strong emphasis on fundamental research, which involves analyzing corporate accounts, meeting with management teams, and interviewing people with insights into the outlook for a specific company or industry.