Stockholm (HedgeNordic) – In the continuous pursuit of improving its portfolio characteristics and risk-reward profile, Brummer Multi-Strategy will redeem in full its investment in the Arete Macro Fund. Arete, which employs a discretionary macro strategy focusing on China and the rest of Asia, has been part of Brummer Multi-Strategy’s multi-strategy, multi-manager portfolio since August 2016. As previously announced, Brummer Multi-Strategy has added two new strategies to its portfolio and plans to add an additional one during the fourth quarter of this year.
Brummer Multi-Strategy (BMS) had a 14.1 percent allocation to the Arete Macro Feeder fund at the end of March, which was cut to 7.2 percent at the end of April. BMS will redeem all of its investment in the fund by August 1. The discretionary macro strategy managed by Hong Kong-based Will Li (pictured) and his team at Ocean Arete Limited has generated an annualized return of 8.6 percent since launching in 2012. After gaining 12.4 percent in 2019, 11.6 percent in 2020 and 8.0 percent last year, the strategy is down an estimated 7.7 percent year-to-date through the end of May.
“Arete has had a positive contribution to BMS’s total return; the decision to redeem the investment is based on an overall assessment of the fund’s ability to contribute to BMS’s risk-adjusted return going forward.”
“Arete has had a positive contribution to BMS’s total return; the decision to redeem the investment is based on an overall assessment of the fund’s ability to contribute to BMS’s risk-adjusted return going forward, in comparison to the other strategies in the portfolio,” the team at BMS explains the decision to redeem from Arete. “The purpose of all investment management decisions is to further improve BMS.”
“The purpose of all investment management decisions is to further improve BMS.”
The portfolio manager of BMS continuously work to improve the multi-strategy vehicle’s portfolio characteristics and risk-reward profile. This process involves identifying and evaluating new strategies, evaluating the existing ones and actively reallocating between them. In this process, BMS invested in a new market-neutral technology-focused equity strategy managed by Henrik Nyblom on May 1 and a new systematic macro strategy run by Brummer & Partners-backed alternative markets trend-follower Florin Court on June 1.
BMS is expected to invest in new market-neutral healthcare-focused equity strategy during the fourth quarter of the year. Similar to the tech-focused strategy managed by Henrik Nyblom, the healthcare-focused strategy will be managed by Hans Mähler within a new PM pod structure exclusively to BMS investors. Last year, Brummer & Partners created a new structure called “PM pods” to onboard new managers that run dedicated investment mandates exclusively for BMS.
Brummer Multi-Strategy (BMS) has gained an estimated 4.8 percent year-to-date through the end of last week, with the leveraged version of the strategy advancing 9.0 percent. The multi-strategy vehicle’s allocations to trend-following strategies contributed strongly to performance this year, with Lynx Asset Management’s systematic trend-following strategy advancing 29.3 percent and Florin Court’s trend-following strategy that focuses on less liquid or exotic markets returning 11.7 percent through the end of May.