Stockholm (HedgeNordic) – Most Nordic and global hedge funds did not enjoy particularly strong returns in 2018, and while the NHX sub-index for Nordic funds of hedge funds fell 4.2 percent on average last year, several of these players managed to avoid the turmoil unharmed.
In fact, what the top three Nordic funds of hedge funds at this year’s Nordic Hedge Award have in common is that none of them has ever booked a down year. This year’s winner of this category is Merrant Alpha Select, which won this title five times in the seven editions of the Nordic Hedge Award. Formuepleje Merkur took the second step on the podium, whereas Atlant Multi-Strategy came in third place.
Merrant – For a Fifth, and Final Win
Merrant Alpha Select (USD), a global market-neutral fund of hedge funds founded by Ulf Sedig and Rolf Hagekrans, secured the title of the “Best Nordic Fund of Hedge Funds” for the fifth time. The fund competed with 19 other Nordic funds of hedge funds for the award. Merrant’s flagship vehicle, which will reach its ten-year anniversary at the end of this summer, earned an annualized return of 4.4 percent since launching in August of 2009. The fund has never registered a down year in nearly one decade of operations.
Merrant Alpha Select has achieved this track record by building a concentrated portfolio of hedge funds that are “true” market-neutral, mutually uncorrelated, as well as uncorrelated to major equity and bond markets. As Rolf Hagekrans explained in a panel discussion at an earlier edition of the Nordic Hedge Award, “Merrant Alpha Select invests in fund managers who apply the same strategy over and over without indulging in opportunistic changes of investment strategy and position taking.”
After building a proven track record of successfully selecting market-neutral hedge fund vehicles, the two founders and portfolio managers running Merrant Alpha Select are handing over the torch to Stockholm-based asset manager Coeli Asset Management. The duo is retiring from the industry after Coeli Asset Management took over the management of Merrant’s two funds at the beginning of April.
Formuepleje’s Fund of Funds Reaches Podium for the First Time
The second place on the podium in the “Best Nordic Fund of Hedge Funds” category went to Formuepleje Merkur, Danish asset manager Formuepleje’s fund of funds. The vehicle managed by Leif Hasager predominantly invests in investment funds such as hedge funds, alternative investment funds, and other funds. Formuepleje Merkur predominantly allocates capital to four main groups of strategies or products: alternative products seeking to generate market-independent returns, alpha-generating strategies, strategies capitalizing on market imperfections, and opportunistic strategies.
Formuepleje Merkur is yet to post an annual loss since launching in June 2013, with the fund having earned an annualized return of 3.3 percent since inception. The Formuepleje fund of funds might have not enjoyed a particularly strong performance in the past three years, but the fund did preserve investors’ capital in 2018. Only three months into the year, Formuepleje Merkur already gained 5.5 percent, becoming one of the best-performing funds of funds in the Nordic Hedge Index so far in 2019.
Atlant Fonder’s Successful Fund Range Helps Win Award
Atlant Multi-Strategy, the result of a merger between Atlant Fonder’s two funds of hedge funds in late 2017, rounded up the top three list in the “Best Nordic Fund of Hedge Funds” category. In its current form, Atlant Multi-Strategy only invests in Atlant Fonder’s own hedge funds: three market-neutral funds, two equity-tilted hedge funds designed to provide exposure to equity markets at lower volatility, and one vehicle designed specifically to protect against market crashes. The Swedish asset manager’s decision to merge its funds of funds has paid off.
Usually maintaining relatively high exposure to Atlant Fonder’s range of market-neutral funds, Atlant Multi-Strategy booked a gain of 1.8 percent last year and successfully avoided last year’s turmoil. Last year, the asset manager’s entire range of funds delivered what they were designed and expected to deliver. The three market-neutral funds avoided the market turmoil unscathed, Atlant Protect produced strong gains as markets tumbled, and the equity-tilted funds largely performed as expected.
“We are very proud of our management results for 2018, not just for the two nominated funds, but overall the entire fund company went great,” Atlant Fonder’s CEO, Michael Ekelund, tells HedgeNordic. As Atlant Fonder’s team has been delivering on its promises, investors took notice and poured more capital into the firm’s entire range of funds during 2018 and 2019. Atlant Multi-Strategy increased its assets under management from SEK 39.5 million at the end of 2017 to SEK 303 million at the end of February this year, whereas the entire firm’s assets increased to SEK 4.9 billion from around SEK 3.3 billion at the end of 2017.
“Atlant Fonder is working towards its long-term goal of becoming the obvious first-line choice in Sweden for market-neutral hedge funds and to be nominated and win an award is a pat on the shoulder and an indication that we are on the right path,” says Ekelund.
The “Best Nordic Fund of Hedge Funds” awards were presented by RBC I&TS