Stockholm (HedgeNordic) – Hedge fund closures in the Nordics are increasingly outpacing launches this year. However, a relatively high number of launches lined up for the second half of 2019 will likely keep the number of constituents in the Nordic Hedge Index above the 170-level.
Seven hedge funds joined the Nordic Hedge Index since the beginning of March, three of which were launched this year. The number of hedge fund closures and index delistings has been higher than usual so far in 2019. Over the same period, eight funds that ceased operations have been delisted from the Nordic Hedge Index, and more already-closed or soon-to-be-closed funds will soon no longer be part of the index.
Nektar, Sweden’s older hedge fund, liquidated at the end of May following redemption from its biggest investor, Brummer & Multi-Strategy. Swedish asset manager Coeli, meanwhile, liquidated event-driven market-neutral fund Coeli Norrsken at the end of May and announced plans to close another two hedge funds at the end of June. Capital Growth Strategy and Capital Preservation Strategy, two funds of funds Coeli took over from Accum Capital in 2017, are set to close down this month. Trend-follower Nordea 1 – Heracles Long/Short MI Fund is set to merge with Nordea 1 – Alpha 15 MA Fund later this week.
Whereas the recent spike in closures is a negative for the Nordic hedge fund industry, a relatively high number of planned launches serves as a reminder of the increasing investor interest in alternative investment products. Innolab, for instance, is preparing the launch of a fully autonomous AI market-neutral fund in the second half of 2019 and Lynx Asset Management is planning the launch a new fund called Lynx Constellation Fund in October. Alternative Equity Partners, meanwhile, is working on the launch of a fund focusing on alternative credit in the third quarter of 2019. Norwegian asset manager Alchemy and Copenhagen-based systematic asset manager Qblue Capital have also announced plans to launch new funds later this year.
Introductions to the seven new members of the Nordic Hedge Index can be found below:
Indecap Guide Avkastningsfond has been employing a long/short equity strategy since mid-December of last year, after having previously operated as a fund of funds. The fund takes long and short positions in equities and equity-related securities, but can also invest in absolute return funds.
Sissener Canopus is a Norwegian absolute return fund that primarily uses a stock-based long/short strategy. The fund’s portfolio management team puts emphasis on fundamental analysis at both company and macro level, seeking to invest in large companies with healthy liquidity, predictable cash flows, and solid balance sheets and corporate governance. Sissener Canopus also invests in fixed-income securities, convertible bonds, and any other transferable securities.
Danske Invest Europe Long-Short Equity Factors employs a long/short equity strategy in European equities, taking long exposure to stocks anticipated to increase in price and short exposure to stocks expected to decline in price or offset the volatility of the long portfolio. The security selection process is based on a quantitative model that incorporates factors such as value, momentum, and quality.
CARN Long Short employs a long/short strategy that relies on disciplined stock picking within European equity markets, with a focus on the Nordics. The fund is managed using the discipline of value investing, with its portfolio management team putting a strong focus on both fundamental analysis and valuation to avoid overpaying for securities. CARN Long Short also maintains a portfolio of short positions in companies judged to be overvalued.
SRV – Fixed Income is a relative value investment fund that focuses on Scandinavian and European fixed-income markets. The fund focuses on exploiting dislocation across fixed-income markets, with tail risk hedging representing a crucial part of the investment strategy. SRV – Fixed Income maintains minimal exposure to interest rate levels, which ensures the ability to meet its expected return target in any state of the economic cycle.
Danske Invest Global Macro Hedge Fund is a global multi-asset long/short hedge fund seeking to generate stable absolute returns over the medium term. The fund’s portfolio management team uses a top-down, macro approach to invest across various asset classes around the globe. The investment strategy is driven by a fundamental top-down macro framework, which is powered by both qualitative and quantitative analysis and tools.
Länsförsäkringar Multistrategi is an actively managed multi-strategy fund that invests globally across several asset classes such as equities and corporate bonds. The fund also invests in securities and asset classes that perform well in times of market turbulence, including government bonds, stable currencies and insurance bonds. On June 12 of 2019, Länsförsäkringar Multistrategi changed its investment focus and approach to become an actively managed multi-strategy fund after being invested in a separate multi-strategy fund.
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