Stockholm (HedgeNordic) – Staffan Östlin’s Adrigo Small & Midcap L/S is celebrating its five-year anniversary this November with an annualized return of 12.4 percent over the past five years. The stock-picking fund was launched in late 2017 under the umbrella of Adrigo Asset Management, which was then acquired by Swedish asset manager East Capital in 2020.
“We are happy to be able to look back and state that we achieved our goals by delivering an average return of 12.4 percent per year, compared to the 8.7 percent return offered by Nordic small companies,” CIO Staffan Östlin comments on the fund’s anniversary. “We are particularly pleased to have achieved a positive return even in a challenging year like 2022 when small caps declined by 25.9 percent,” he emphasizes. Adrigo Small & Midcap L/S edged up 0.2 percent over the first ten months of 2022.
“We are happy to be able to look back and state that we achieved our goals by delivering an average return of 12.4 percent per year.”
Adrigo Small & Midcap L/S is a stock-picking hedge fund looking for long and short opportunities in the Nordic small- and mid-cap segment. The portfolio management team comprised of Östlin and co-portfolio manager Johan Eriksson has been on a quest to generate a long-term annual return in the range of 8-12 percent with a lower risk than the broader Nordic equity markets. The fund runs a concentrated, high-conviction portfolio of 25 to 30 long positions allocated across three building blocks: Core Five, Dynamic, and High-Potential.
Following East Capital’s acquisition of Adrigo Asset Management in May 2020, Staffan Östlin has continued to run Adrigo Small & Midcap L/S with the same team and the same strategy – albeit with additional resources available under the umbrella of a larger firm. The ownership change led to the merger of Adrigo Hedge, once the flagship hedge fund of Adrigo Asset Management, into Adrigo Small & Midcap L/S.
A year later, Max Mitteregger’s long/short equity fund Gladiator Fond was also merged with Adrigo Small & Midcap L/S under Adrigo’s management. The merger was a token of confidence from Mitteregger, who was looking to hand over his investors’ capital into safe hands after he decided to stop managing money for Gladiator. “A guiding principle has been that my co-investors should get the best possible continuation,” Mitteregger commented on his decision to merge Gladiator into Östlin’s fund.
According to Östlin, the formula for success and prosperity in the challenging hedge fund business revolves around “a strong investment team.” Östlin goes on to add that “the dynamism of the portfolio managers is equally important.” With Adrigo Small & Midcap L/S managed together by both Östlin and Johan Eriksson, “the ability to compliment each other while also challenging and questioning each other’s views and opinions” also plays a significant role in successful stock picking. At the end of the day, however, the fund’s success depends on the team’s ability to find “companies that can grow on their own and are not dependent on macroeconomic factors,” according to Östlin. “We see good conditions for Adrigo for 2023.”
