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Taking a Step Back to Move Forward

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Stockholm (HedgeNordic) – Norwegian long/short equity fund Sissener Canopus brought its net market exposure to 4.4 percent at the end of February and into negative territory in early March in response to the development of COVID-19. “This is roughly a market-neutral exposure and the lowest level since the start of Sissener Canopus in April 2012,” writes the fund founded by Jan Petter Sissener (pictured) in a letter to investors. The low exposure helped the fund navigate this month’s turbulent markets.

Sissener Canopus, a bottom-up stock-picking fund that uses a broad range of instruments to generate alpha, was down around three percent month-to-date through March 9. In contrast, the Oslo Stock Exchange fell by nearly 12 percent during the same period. On Monday, when panic that began in the oil market spread to global financial markets, Sissener Canopus ended the day down only 0.5 percent. The Oslo Stock Exchange fell by 8.6 percent on the day.

“We have reduced market exposure both through the short sale of shares with cyclical exposure and by establishing short positions in individual shares, such as Equinor. In addition, we established hedging positions in the fund by shorting the stock markets in Norway, Europe and the United States,” the Oslo-based asset manager writes in a recent update to investors. The update states that the fund will continue to maintain low exposure to equity markets, as uncertainty stemming from the coronavirus pandemic is still high.

“Our goal for Sissener Canopus is to continue to maintain a low equity exposure to protect downside risk as long as uncertainty surrounding COVID-19 is high.” The fund keeps dry powder in reserve, ready to be deployed when opportunities arise and uncertainty surrounding the coronavirus fades. “We are ready to take on more risk and buy shares when we think the time is right,” writes the update to investors. “Many companies appear very attractively priced today, and we want to take the opportunity to buy good quality companies. The correction can be a good opportunity to invest more.”

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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

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