- Advertisement -
- Advertisement -

Related

Two Weeks Feel Like a Year or Two

Powering Hedge Funds

Stockholm (HedgeNordic) – “It has been just over two weeks since we wrote our comments on February, but it feels more like two years,” says Mattias Nilsson (pictured), a portfolio manager of Catella Hedgefond. The flagship hedge fund of Stockholm-based asset manager Catella Fonder was down 14.2 percent this month through March 18, extending the year-to-date losses to 16.1 percent. Global stock markets incurred much worse declines.

“Concerns about the spread and impact of the coronavirus have accelerated day by day,” writes Nilsson in an update to investors. Despite announcements of both monetary and fiscal stimulus measures, “the world’s stock markets have stuck to their trajectory – downward.” Investor sentiment in the stock market “is now lower than it was at the nadir of 2009,” says Nilsson, citing a recent survey of global fund managers conducted by the Bank of America. Catella Hedgefond fell by about 14 percent month-to-date, with both equity and fixed-income positions detracting from performance.

“Our long positions have lost significantly more than our short positions,” says Nilsson, as relatively cheaper stocks fell more than richly-valued stocks. Catella Hedgefond employs a value-oriented approach to stock selection, which involves going long under-priced stocks and going short overvalued ones.

Correlations between stocks and asset classes also increased in the recent market environment. According to Nilsson, “cheap companies that previously had a low market beta” suddenly exhibited significantly higher beta or correlation with the market during the downturn. The same phenomenon has affected Catella Hedgefond’s investments in preference shares, “which previously moved marginally while in practice are now acting like ordinary shares.”

The high volatility across financial markets has forced Catella Hedgefond and other players to reduce their gross market exposure, “which has led to positions being divested at non-optimal price levels,” according to Nilsson. “We are naturally disappointed with the development thus far,” acknowledges the fund manager, “but in recent weeks we have tried to create the best possible platform to exploit the opportunities that will undoubtedly arise.” The big question, however, is when? Nilsson reckons that “a turnaround in financial markets should come before it becomes apparent in the real economy or in the number of virus cases.”

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 & Partners Strengthens Board With Former PP Pension CEO

Healthcare-focused boutique Rhenman & Partners has strengthened its board of directors with the appointment of Kjell Norling, former CEO of occupational pension fund PP...

From Market Neutral to Long-Biased: Coeli Energy Opportunities at Three Years

After years of running energy-focused market-neutral strategies, portfolio managers Vidar Kalvoy and Joel Etzler pivoted to a long-biased long/short approach in early 2023 with...

January’s Volatile Path to Strong CTA Returns

In January, the NHX CTA Index generated strong performance, mainly due to profits in precious metals, despite a major market reversal at month-end. Performance...

Lynx Catches Trends Across All Asset Classes in January

January proved to be one of the strongest months in years for trend-following CTAs, a favorable backdrop that also benefited Lynx Asset Management’s trend-following...

Coda Posts Strong January Despite Violent Precious-Metals Sell-Off

Last year’s second-best performing Nordic hedge fund, Coda Global Opportunities, began 2026 with a strong 10.4 percent return in January, despite suffering a sharp...

Short Alpha Drives Brummer Multi-Strategy’s 2025 Performance

Brummer Multi-Strategy delivered a solid performance in 2025, supported by a sustained run of positive monthly returns from the beginning of the summer that...

Allocator Interviews

In-Depth: Diversification

- Advertisement -

Voices

Request for Proposal

- Advertisement -
HedgeNordic
Privacy Overview

This website uses cookies so that we can provide you with the best user experience possible. Cookie information is stored in your browser and performs functions such as recognising you when you return to our website and helping our team to understand which sections of the website you find most interesting and useful.