Stockholm (HedgeNordic) – One noteworthy trend in the Nordic hedge fund industry – mirroring the broader hedge fund industry – has been the slow extinction of funds of hedge funds. The number of active funds of funds in the Nordics has steadily decreased year after year, from 33 at the beginning of 2015 to 21 by late 2018, and currently standing at only seven. With Carnegie Fonder recently announcing the closure of its fund of hedge funds, Carnegie Vega, the trend of survival of the fittest persists in this corner of the industry.
“In June, the fund company decided to cease managing the fund, motivated by the fund’s decreasing AUM in connection with the fund’s largest owner redeeming his holding,” writes the team running Carnegie Vega, which had SEK 326 million in assets at the end of July. “The fund can no longer be run with an efficient allocation,” says the letter to investors. “The last valuation date for the fund is the last day of August, after which the fund will be liquidated if it lacks assets and shareholders at that time,” states the team behind Carnegie Vega. “In the event that certain shareholders have not redeemed their shares in full, the management of the fund will be handed over to the custodian.”
“In June, the fund company decided to cease managing the fund, motivated by the fund’s decreasing AUM in connection with the fund’s largest owner redeeming his holding.”
The fund of hedge funds has been managed by Simon Reinius and Emanuel Furubo since 2019, initially under the umbrella of Optimized Portfolio Management (OPM). In 2020, Carnegie Fonder acquired several OPM funds, including Vega, from CAAM Fund services, which was part of the same asset management group – Carneo – as Carnegie Fonder. Launched in mid-2003, Carnegie Vega has been one of the longest-running hedge funds in Sweden and the Nordics. Vega has sought to invest globally in five to 15 hedge funds with low systematic risk.
Carnegie Vega has delivered an annualized return of nearly 2.0 percent since its inception but struggled to generate returns in recent years. The funds of funds has recorded a negative cumulative return of 2.2 percent over the past three years and a negative return of 2.9 percent over the past five years. Among the multi-manager hedge funds currently operational within the Nordic Hedge Index, Carnegie Vega reported the lowest return over the past five years. Once again, the principle of survival of the fittest has demonstrated its strength.
