Stockholm (HedgeNordic) – Some 15 years ago in May of 2008, Ola Wessel-Aas and Andreas Petterøe at Taiga Fund Management launched their long-biased long/short equity fund in one of the most challenging markets in a lifetime. The S&P 500, for instance, lost about six percent in the first four months of 2008, only to drop another 34 percent through the end of the year as the global economy teetered on the brink of collapse.
After edging down seven percent during the eight months of its operation in 2008, Taiga Fund went on to advance 60 percent in 2009 and reach its 15-year anniversary in May this year with an annualized return of 13.4 percent. Looking at the EUR share class that goes back to May 2008, Taiga Fund is the second-best performing member of the select group of about 30 long-running Nordic hedge funds with a lifespan that exceeds 15 years.
“Taiga Fund follows a bottom-up, case-by-case investment approach. Equity exposure at any point in time is simply the aggregate of our single stock long and short investment ideas.”
Taiga Fund relies on a concentrated, value-oriented, and long-biased approach to investing. The team managing Taiga Fund also engages in opportunistic short-selling with a focus on single stocks to contribute to the performance of the overall portfolio rather than provide hedging. Despite maintaining a long bias, the portfolio management team does not target a specific gross or net equity exposure. “Taiga Fund follows a bottom-up, case-by-case investment approach. Equity exposure at any point in time is simply the aggregate of our single stock long and short investment ideas,” explains Wessel-Aas.
This approach to investing has paid off over the 15 years since the fund’s inception. Taiga Fund’s NOK share class, reflected in the Nordic Hedge Index, has delivered an annualized return of 12.7 percent since mid-2009 with an annualized volatility of 10.1 percent, resulting in an inception-to-date Sharpe ratio of 1.24. Taiga Fund edged down 6.8 percent in 2022, as it “proved difficult to insulate the fund from a dismal year for small-caps in our region,” according to Wessel-Aas.
Up 9.0 percent in the first four months of 2023, Taiga Fund has already recovered the losses incurred in last year’s challenging market environment. “The fund experienced a strong rebound in the first quarter, with the 8.9 percent gain compensating for the 2022 loss and finally closing in on the all-time high,” says Wessel-Aas. “The quarterly return was ahead of regional small-cap equity indices that continue to lag the overall market and which remain 17-19 percent below peaks levels.”