- Advertisement -
- Advertisement -

Varma Divests From Credit, Goes Into Macro Hedge Funds

- Advertisement -

Stockholm (Hedgenordic/Bloomberg) – Varma, the Finnish private-sector pension firm with about 45 billion euros of assets, may shift more money into global macro investments as it sours on credit, Bloomberg reports.

Varma Mutual Pension Insurance Co. may shrink its exposure to credit long/short strategies later this year or in the first half of 2019, according to Kai Rimpi, its director of hedge funds. The company has already cut investment in the strategies over the last two years to 5 percent of its portfolio, from 15 percent.

“Corporate credit long/short hedge funds are one area where it’s just very difficult to generate the risk-adjusted returns we’re looking for”, Rimpi said in an interview. “It’s performed extremely well for years but now that spreads are tight, it will make producing similar returns difficult.”

“Corporate credit long/short hedge funds are one area where it’s just very difficult to generate the risk-adjusted returns we’re looking for”

Varma has about 8.5 billion euros, or some 18 percent of the money it manages, invested in hedge funds. Macro allocations may climb to 18 percent of the total from the current 15 percent, according to Rimpi. The firm also invests in multi-strategy funds and relative value.

“It’s been difficult for many years, but we feel that opportunities are definitely improving in global macro, particularly for developed markets,” he said.

According do databases tracking the global macro industry, performance this year has been a mixed bag. The Barclayhedge Global Macro Index was down 0.2 percent by the end of September while the Eurekahedge Global Macro Hedge Fund Index posted a net loss of 0.8 percent. In 2017, those indices produced returns of around 4 percent.

Varma’s hedge fund investments are up 3.4 percent through June 30. That’s down from an 8.5 percent gain for the whole of last year and a 5.6 percent rise in 2016, according to the company.

Photo by Porapak Apichodilok from Pexels

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

Our newsletter is sent once a week, every Friday.

HedgeNordic Editorial Team
HedgeNordic Editorial Team
This article was written, or published, by the HedgeNordic editorial team.

Latest Articles

Niche Opportunities in Private Credit Amid Record Dry Powder Levels

Stockholm (HedgeNordic) – The evolution of private credit as an asset class has been remarkable, attracting increasing allocations from investors. Assets under management by...

Tidan Readies Systematic Macro Launch with Linus Nilsson

Stockholm (HedgeNordic) – Stockholm-based fund boutique Tidan Capital is broadening its suite of strategies with the upcoming launch of its systematic macro initiative in...

Chelonia to Embrace Long-Biased Strategy

Stockholm (HedgeNordic) – Despite securing a spot among the top 15 best-performing Nordic hedge funds this year as a market-neutral fund, Chelonia Market Neutral...

Nykredit Hedge Funds Battle to Reverse Downtrend in Assets

Stockholm (HedgeNordic) – Despite showing improved performance, the fixed-income hedge fund trio at Nykredit Asset Management is struggling to reverse a downward trend in...

“Boring” Short Sellers Partner with Sector for Fund Launch

Stockholm (HedgeNordic) – Renowned short seller Andrew Left has been quoted as saying that short sellers are becoming “a dying breed.” Despite the departure...

Adrigo Catapults into Top Five After Strong May

Stockholm (HedgeNordic) – Adrigo Small & Midcap L/S has surged into the top five best-performing Nordic hedge funds for the year, boasting a return...

Allocator Interviews

Latest Articles

In-Depth: High Yield

Voices

Request for Proposal

- Advertisement -