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Impega: “Small but Agile Version of NBIM”

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Stockholm (HedgeNordic) – Norges Bank Investment Management (NBIM), responsible for managing the Norwegian Government Pension Fund Global, has cultivated a wealth of talent over the years. Many former NBIM employees possess the experience, expertise, and drive to venture outside the world’s largest sovereign wealth fund. Petter Kvamme Jensen, who worked at NBIM for 12 years, embarked on a journey into the money management industry last year by launching an equity-focused hedge fund.

Launched in May of last year, Impega “started with the idea of acting as a small but agile version of NBIM,” according to Petter Kvamme Jensen, who was employee “number 19” at NBIM. “We aim to invest just as safely and with a focus on buy and hold, but with the ability to add active trading both to mitigate risk and to maximize returns,” he elaborates. Initially involved in NBIM’s operations department handling exchange-traded derivatives, and later as a money market trader in the trading department, Kvamme Jensen now oversees an equity-focused fund equipped with tools to adjust portfolio risk depending on market conditions.

“Impega started with the idea of acting as a small but agile version of NBIM.”

Impega’s portfolio of long positions adopts a three-tiered structure, spanning high-quality large-cap dividend stocks, mid-cap value stocks, and small-cap growth stocks. “The first tier, about 30 to 50 percent of gross exposure, consists of high-quality, large-cap dividend stocks with a long-term index approach,” explains Kvamme Jensen. The second tier, representing about 20 to 40 percent of gross exposure, includes investments in “mid-cap value stocks believed to be trading at a discount.” The third tier, making up 10 to 25 percent of gross exposure, involves investments in “selected small-cap growth stocks that exhibit above-average revenue and earnings growth potential.”

While maintaining a long-term buy-and-hold approach for the core positions in the first tier, Kvamme Jensen adopts a more active trading stance for the second and third tiers. Engaging in short-term trading and active risk management, Kvamme Jensen employs various strategies such as alpha trading, risk mitigation through diversification, margin utilization, cash management, and flexible long/short strategies tailored to prevailing market conditions. “Alpha will be produced more sporadically, with all tiers expected to contribute alpha over a full market cycle,” notes Kvamme Jensen.

“Alpha will be produced more sporadically, with all tiers expected to contribute alpha over a full market cycle.”

Despite structuring the portfolio across three tiers, Petter Kvamme Jensen maintains a concentrated portfolio of approximately ten long-term positions, primarily in Nordic and US equity markets. A key common characteristic of Kvamme Jensen’s positions is centralized ownership. “Conceptually, the premise is simple: when a company is underperforming, a large owner is better positioned and incentivized to correct course, to improve business and stock performance,” explains Kvamme Jensen.

A significant aspect of his investment strategy involves trading around positions and utilizing derivatives and other instruments such as ETFs to adjust equity market exposure, all with the aim of delivering a net return of 12 to 16 percent per annum. “Just before significant news events like the non-farm payroll, I may want to take down risk using ETFs rather than selling everything,” Kvamme Jensen provides one example of the use of risk management. Since its launch in May 2023, Impega has delivered solid performance by generating a cumulative return of 29 percent in its first eleven months of operation.

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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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