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Shepherd Turns the Power Off

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Stockholm (HedgeNordic) – Shepherd Energy Portfolio, which employed trend-following and relative-value strategies in the Nordic power markets, has been closed down “due to insufficient liquidity and the ultra-high volatility in the gas and power market.” All positions in Shepherd Energy Portfolio had been unwinded by the end of October, with Stockholm-based Shepherd Energy AB ceasing to provide any portfolio management services as of the beginning of October.

“We are now sorry to inform you that Shepherd Energy Portfolio is closing down and Shepherd Energy AB will not provide any Portfolio Management services after October 2021,” wrote the team at Shepherd Energy AB in a letter. “Both the electricity market and the gas market have been extremely volatile during the year, which have affected the market liquidity and the predictability,” continues the letter. “Shepherd Energy has therefore come to the conclusion that speculative investments in the energy market will be too riskful in the near future.”

“Both the electricity market and the gas market have been extremely volatile during the year, which have affected the market liquidity and the predictability.”

Shepherd Energy Portfolio, the “Best Nordic CTA” of the 2018 edition of the Nordic Hedge Award, was down 6.8 percent year-to-date through its closure at the end of October. The multi-strategy futures-based trend-follower relied on discretionary- and systematic-based investing to capture both short- and long-term trends in the Nordic market for electricity futures, as well as engage in electricity swap trades between Nordic and German electricity markets. The vehicle achieved its best year in 2018 with an annual return of 13.8 percent, which beat its previous record of 13.6 percent reached for 2016.

“Due to insufficient liquidity and the ultra-high volatility in the gas and power market, all positions in Shepherd Energy Portfolio have been closed out by the end of October.”

“Due to insufficient liquidity and the ultra-high volatility in the gas and power market, all positions in Shepherd Energy Portfolio have been closed out by the end of October,” says Shepherd Energy’s latest letter to investors. “The company’s management estimates that the unfavorable situation in the market will continue to prevail for at least the next six months. Therefore no new positions will be taken onwards where the Shepherd Energy Portfolio has been fully liquidated in a controlled and commercial manner and all assets have been returned to the investors.”

 

Photo by Kelly Sikkema on Unsplash

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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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