Stockholm (HedgeNordic) – In 2020, the five top-performing Nordic hedge funds all delivered gains of at least 50 percent for the 12 months ended December 31. In third place at the end of 2020 was Alcur Select, which posted a return of about 70 percent, almost 20 percentage points higher than its first-place finish for 2019. The long-biased small-cap-focused equity fund managed by a Stockholm-based team led by Wilhelm Gruvberg has delivered a cumulative return of over 170 percent since launching in May of 2018, corresponding to an annualized return of 45 percent.
“We are very pleased with the return for 2020,” Gruvberg comments on the fund’s performance for 2020. “We beat the 51.4 percent-return achieved in 2019, which looked rather unlikely to replicate back in March 2020,” he continues. “We are especially satisfied about how the fund performed during the turbulent months of February and March,” emphasizes Gruvberg.
“We beat the 51.4 percent-return achieved in 2019, which looked rather unlikely to replicate back in March 2020.”
Alcur Select, which seeks to maintain a net market exposure between 50 and 100 percent over a full economic cycle, lost a cumulative 9.0 percent during February and March. In contrast, the Carnegie Small Cap Index (CSX) fell by more than 25 percent during the two-month period. “Our fund’s outperformance in that period was good given the high net exposure the fund usually maintains,” Gruvberg points out.
“We are especially satisfied about how the fund performed during the turbulent months of February and March.”
Discussing stock selection and alpha generation, Gruvberg underlines the investment in Danish-listed Flügger Group, which designs and markets a wide assortment of decorative paints, wood stains, wallpaper and accessories. “We would like to highlight a true value case on Flügger that almost doubled during the year but still is one of the lowest valued companies in the Nordic space,” says Gruvberg. “This is even more obvious if you consider what PPG and Akso Nobel are currently willing to bid for Finnish peer Tikkurila.”
Closed to New Investors, Older Comrade, and Outlook
With its outstanding performance leading to strong levels of investor interest, Alcur Select approached and exceeded its asset size limit of SEK 2 billion set at inception. Consequently, Stockholm-based Alcur Fonder has decided to close the fund for the subscription of new units beyond 2020. “Alcur Select is closed to new capital, but we recently launched our new fund, Alcur Grow, where we concentrate our best long ideas,” says Gruvberg. “The fund is headed by Mikael Holm with support from the Alcur team.” Alcur Grow was launched at the beginning of 2021, seeking to maintain a portfolio that contains between 25 to 30 Nordic small- and medium-sized public companies.
“Alcur Select is closed to new capital, but we recently launched our new fund, Alcur Grow, where we concentrate our best long ideas.”
Alcur Fonder’s oldest fund, a lower-risk long/short absolute return fund launched in early 2007, recorded its best annual performance last since inception. Alcur gained 18.8 percent last year, having delivered an annualized return of 5.7 percent since January 2007. Alcur maintained an average net market exposure of 12 percent over the course of last year, which was in line with its historical average. According to the Alcur team, the fund’s strong performance partly stems from successfully capitalizing on several themes, “where we have owned many of the digitalization winners and avoided or shorted many losing sectors.”
“We still find value and decent risk-adjusted returns in forgotten segments and some hidden gems.”
Sharing his thoughts and outlook on the market environment, Gruvberg says that “some parts of the market are definitely reminiscing of historic bubbles and expected long-term returns in certain segments will definitely be lower near term.” He goes on to emphasize that “the market is chasing trends no matter the price nor valuation,” adding that “we have all seen the signs before.” Gruvberg acknowledges that “timing for a correction is as usual tricky to predict.” However, “we still find value and decent risk-adjusted returns in forgotten segments and some hidden gems.”