- Advertisement -
- Advertisement -

Formue Nord Pausing New Subscriptions

- Advertisement -

Stockholm (HedgeNordic) – Formue Nord Markedsneutral, a Danish market-neutral fund focusing on special situations, has announced it will be closing its doors to new investors at the end of April following strong performance and accelerated investor capital inflows. The special situations-focused fund has grown to manage DKK 195 million (roughly €26 million) at the end of March from DKK 11.6 million at its inception in December 2015.

Formue Nord Markedsneutral, managed by a three-member team comprised of CIO Rasmus Viggers (pictured right), CEO Thøger Dam Johansen (pictured left) and analyst Mikkel Hagel, is pausing new subscriptions starting from May but may open for subscriptions again in the future. Commenting on the decision, Viggers tells HedgeNordic that “we have seen an acceleration of capital inflows, and it is important for us to grow at a pace that matches our niche focus on the investment side.” The fund uses an opportunistic investing approach that focuses on special situations, with its flagship strategy involving the participation in rights issues and other related deals. Increasing assets under management without regard to the fund’s niche and limited opportunity set can hurt investors’ returns.

As Viggers explains, “we have chosen to pause new subscriptions to ensure the best possible conditions for creating high and uncorrelated returns for the co-investors who have entrusted us with their capital.” In addition to participating in rights issues and related deals, Formue Nord Markedsneutral also employs other alpha-generating strategies such as buying and exercising mispriced subscription rights, engaging in bridge financing deals, as well as exploiting the so-called January effect.

Despite having a diverse toolkit at their disposal, the team’s primary strategy entails offering funding arrangements (involving equity, short-term debt, or a combination of both) to Nordic small- and mid-cap companies – a not-so-big market for a fund with rapidly growing assets as a result of strong performance and new investor demand. “If the number of opportunities in our markets improves or we find new opportunities in current or new markets where we can operate, we can re-open to new investors at a later date,” Hagel tells HedgeNordic.

“If the current pace of subscriptions were to continue,” argues Hagel, “there is a risk of diluting returns in the future, and we would rather have a margin to this risk than look back thinking we should have acted sooner.” Formue Nord Markedsneutral aims to deliver uncorrelated returns by capitalizing on complex, misunderstood opportunities, and has kept its promises to investors so far. The Danish fund earned an annualized return of 11.4 percent since running the strategy in a beta-neutral manner in February 2016. The fund gained 13.6 percent last year when the Nordic Hedge Index fell 3.5 percent, ranking as last year’s third-best-performing Nordic hedge fund.

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

Our newsletter is sent once a week, every Friday.

Eugeniu Guzun
Eugeniu Guzun
Eugeniu Guzun serves as a data analyst responsible for maintaining and gatekeeping the Nordic Hedge Index, and as a journalist covering the Nordic hedge fund industry for HedgeNordic. Eugeniu completed his Master’s degree at the Stockholm School of Economics in 2018. Write to Eugeniu Guzun at eugene@hedgenordic.com

Latest Articles

Rhenman’s Healthcare Fund Transitions to Article 8 Classification

Stockholm (HedgeNordic) – Since its inception in mid-2009, the Rhenman healthcare fund has focused on investing in healthcare companies, which contribute to at least...

The ART of Finding Right Tails

Stockholm (HedgeNordic) – Philosopher Nassim Nicholas Taleb coined the term ‘Black Swan’ to describe the tendency to underestimate the likelihood of extreme, hard-to-predict events,...

Cevian Acquires Stake in Swiss Insurer

Stockholm (HedgeNordic) – Swedish activist investor Cevian Capital has unveiled a 3.12 percent stake in Swiss insurer Baloise Holding AG. The stake is valued...

Nordic Hedge Funds Sustain Momentum

Stockholm (HedgeNordic) – Following its strongest first quarter in 15 years, the Nordic hedge fund industry sustained momentum into April. As reflected by the...

The Hands-On Approach of NCI Advisory in Debt Investing

Stockholm (HedgeNordic) – With over 45 years of expertise in structured finance and debt asset management, Jørgen Beuchert has dedicated the last 15 years...

Hedge Fund Journal: Calculo Best in Commodity Trend Following

Stockholm (HedgeNordic) – Calculo Evolution Fund, a pure commodity trend-follower based in Denmark, has been recognized as the “Best Performing Commodity Trend Follower” over...

Allocator Interviews

Latest Articles

In-Depth: High Yield

Voices

Request for Proposal

- Advertisement -