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Month in Review – January 2023

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Stockholm (HedgeNordic) – After experiencing their most challenging year since 2008, Nordic hedge funds enjoyed their best start to the year since 2015 as risk-on sentiment prevailed across financial markets. In January, the Nordic hedge fund industry gained 1.9 percent on average, recouping some of the 6.1 percent decline incurred during 2022.

Month in Review – January 2023

Four of the five strategy categories within the Nordic Hedge Index ended the first month of 2023 in positive territory, with CTAs booking losses after delivering solid performance in 2022. Equity hedge funds advanced 2.4 percent in January, led by long-biased strategies. After a challenging 2022, fixed-income hedge funds gained 2.2 percent in the first month of 2023. Multi-strategy (or diversified) funds and funds of hedge funds (or multi-manager funds) returned 1.6 percent and 1.5 percent, respectively, in January. CTA vehicles booked an average decline of 1.0 percent, as the more traditional trend-following funds incurred losses after a strong 2022.

At a country level, the Finnish hedge fund industry gained the most in January with an average advance of 3.5 percent. Norwegian hedge funds followed suit with a monthly advance of 2.2 percent on average. The Danish hedge fund industry ended the first month of 2023 in the green at 1.7 percent. Swedish hedge funds, which account for the largest portion of the Nordic hedge fund universe, gained 1.6 percent in January.

The performance dispersion between last month’s best- and worst-performing members of the Nordic Hedge Index remained at the levels observed in the final months of 2022. In January 2023, the top 20 percent of Nordic hedge funds advanced 7.2 percent and the bottom 20 percent lost 2.5 percent, representing a top-to-bottom dispersion of 9.7 percent. Three in every four members of the Nordic Hedge Index with reported January figures posted gains last month.

Top Performers in January 2023

HCP Focus Fund, which maintains a very concentrated equity portfolio of typically highly-valued quality companies, was last month’s best-performing constituent of the Nordic Hedge Index. The fund advanced 23 percent in the first month of 2023 to trim some of its 53 percent loss incurred last year.

Coeli Global Opportunities, a long/short equity fund run by stock pickers Andreas Brock and Henrik Milton, advanced 11.4 percent in January to bring its inception-to-date return in positive territory. Launched in mid-2022, Coeli Global Opportunities borrows long ideas from the two long-only equity funds managed by the Coeli duo Andreas Brock and Henrik Milton. PriorNilsson Fastighet, PriorNilsson Fonder’s real estate-focused long-biased long/short equity fund, was up 11.3 percent in the first month of 2023. The fund has gained a cumulative 33 percent since launching in October of 2022.

HCP Quant, which uses a systematic-driven approach to invest in lowly-valued stocks, gained 10.4 percent in the first month of the new year after booking a loss of 17.6 percent for 2022. Pareto Total, a long-biased long/short equity fund predominantly investing in high-quality businesses globally, advanced 10.2 percent in January 2023. Last month’s advance recouped most of the fund’s 2022 decline of 11.2 percent.

 

The Month in Review for January 2023 can be downloaded below:

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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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