Stockholm (HedgeNordic) – Nordic hedge funds made a promising start to the second half of the year, surpassing the second-highest monthly gain recorded this year in June. As reflected by the Nordic Hedge Index, the industry gained 1.1 percent on average in July (as reported by 90 percent of funds), extending the year-to-date advance to 2.7 percent. The top 20 percent of the funds achieved an average gain of 4.6 percent, while the bottom 20 percent experienced an average loss of 1.9 percent.
Four out of the five strategy categories within the Nordic Hedge Index registered positive results in July. After three consecutive months of gains, Nordic CTAs as a group edged down in July, with an average drop of 0.3 percent. In contrast, fixed-income hedge funds enjoyed a strong month, achieving an average advance of 1.9 percent. This performance allowed the group to extend its year-to-date gains to 5.1 percent. Meanwhile, equity hedge funds posted an average gain of 1.0 percent in July, contributing to the 3.2 percent advance over the first seven months of 2023. Diversified hedge funds and multi-manager funds achieved gains of 0.9 percent and 0.6 percent, respectively.
At the country level, the Danish hedge fund industry, primarily populated by fixed-income strategies, performed best in July with an average gain of 1.9 percent. Finnish hedge funds also experienced positive performance, with an average gain of 1.3 percent to bring the 2023 performance to 5.1 percent. The Norwegian hedge fund industry is up 4.4 percent over the first seven months of the year following an advance of 1.1 percent in July. The Swedish hedge fund industry, leading the Nordic region with the highest number of active hedge funds, posted a 0.6 percent gain in July and a 0.7 percent advance over the first seven months of the year.
The performance dispersion between the best- and worst-performing members of the Nordic Hedge Index remained relatively stable month-over-month. In July, the top 20 percent of Nordic hedge funds gained 4.6 percent and the bottom 20 percent lost 1.9 percent, resulting in a top-to-bottom dispersion of 6.6 percent versus 6.7 percent in June and 6.8 percent in May. In June, the top 20 percent were up 4.3 percent and the bottom 20 percent were down 1.9 percent. More than two-thirds of the members of the Nordic Hedge Index with reported July figures reported gains for the month.
Top Performers in July
Adrigo Small & Midcap L/S emerged as the top performer in the Nordic Hedge Index in July with a gain of 14.2 percent. Managed by CIO Staffan Östlin and portfolio manager Johan Eriksson, the long/short equity fund achieved its strongest monthly gain since launching more than five years ago after a challenging first half of the year. Eleven of its mid-sized positions rose more than ten percent during the month, with positive contributions also driven by a cash offer for its shares in Norwegian game-based e-learning platform Kahoot!, along with successful short positions.
Following closely, PriorNilsson Fastighet, a long-biased long/short equity fund focused on Swedish and global real estate markets, reported a monthly gain of 8.5 percent. The fund managed by Gustav Sällberg achieved a cumulative 18.7 percent since launching in October of last year. HCP Quant and HCP Focus, two funds under the umbrella of Helsinki Capital Partners, gained 6.5 percent and 6.3 percent in July, respectively. HCP Focus, which runs a concentrated long-only equity strategy focused on companies benefiting from the digital revolution, has emerged as this year’s best-performing member of the Nordic Hedge Index with a 55.4 percent gain.
HP Hedge Fixed Income, one of the two hedge funds under Danish fixed-income boutique HP Fonds, reported a 6.3 percent gain in July to bring its performance for the year in positive territory at 4.0 percent. Gersemi Shipping Fund, a shipping long/short equity hedge fund run by Joakim Hannisdahl, gained an estimated 5.8 percent in its first month of operations.
The Month in Review for July 2023 can be downloaded below: