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One Year In, Danske’s GAO Marches Forward

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Stockholm (HedgeNordic) – The success of a hedge fund’s launch often plays a crucial role in shaping its future. Danske Bank Asset Management’s Global Alternative Opportunities (GAO) had an impressive inaugural year launching in August of 2022.

Despite debuting just ahead of the worst September for equity markets since 2002, Danske Invest Global Alternative Opportunities (GAO) has generated a cumulative return of 6.1 percent. The fund achieved positive performance in 11 out of the first 13 months for the share class tracked within the Nordic Hedge Index. The track record also reflects low volatility in performance, resulting in an inception-to-date Sharpe ratio of 2.3 based on monthly observations. “One of the early successes is that the strategy has worked exactly as intended,” said Søren Funch Adamsen, Chief Portfolio Manager and Head of Portfolio Construction at Danske Bank Asset Management, back in April.

As a nominee for the Rookie of the Year award at the 2022 Nordic Hedge Award, Danske Invest Global Alternative Opportunities (GAO) was considered by peer fund managers part of the jury board as one of the most promising hedge fund launches in the Nordic universe in 2022. As GAO reaches its first anniversary, the fund has, so far, successfully reached its aim of delivering attractive risk-adjusted returns with low correlation to traditional asset classes. Starting with less than €100 million in August of the previous year, the fund now manages over €400 million in assets under management as of the end of the summer.

“We are happy to celebrate the one-year anniversary of our Global Alternative Opportunities hedge fund strategy. Overall, we have seen and continue to see many pockets of opportunity.“

“We are happy to celebrate the one-year anniversary of our Global Alternative Opportunities hedge fund strategy,” comments Chief Portfolio Manager Markku Vartiainen. “Overall, we have seen and continue to see many pockets of opportunity,“ he elaborates. Managed by Markku Vartiainen and Aleksander Koldborg Tetzlaff from Danske Bank Asset Management, GAO seeks to capture what the team regards as ‘true’ alternative risk premia as compensation for actual risk rather than behavioral-based or data-mined premia.

Danske Bank’s GAO aims to capture true alternative risk premia, primarily within the equity, fixed income, and volatility spheres by employing 12-15 individual strategies. Alternative risk premia across most of these asset classes became more attractive to harvest in 2022 amid plunging equity prices, rising interest rates, and increasing volatility. While the excess risk premia have normalized towards the end of the year and going into 2023, GAO managed to find and capture alternative risk premia throughout the first eight months of 2023 as well.

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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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