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Nordea Liquidates Market-Neutral Strategy

Report: Systematic Strategies

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Stockholm (HedgeNordic) – Jakob Nordestedt, who returned to Stockholm in 2018 after pursuing a career in London, began managing a market-neutral equity strategy under the umbrella of Nordea Asset Management in mid-2020. Despite the strategy going from strength to strength after a challenging start, Nordea 1 – Global Equity Market Neutral Fund has now been liquidated. This marks the first fund closure of 2024 in the Nordic hedge fund universe.

Nordestedt, who joined HSBC Asset Management in May 2010 as a senior portfolio manager of HSBC’s market-neutral European Alpha Fund, spun out the strategy into Mojna Capital Partners in the summer of 2013. After joining the now-closed Bodenholm in London in 2017 and relocating to Stockholm one year later, Nordestedt started contemplating taking charge of his own strategy. Subsequently, he partnered with Nordea to launch a fund that employed the market-neutral strategy he had previously overseen at HSBC and Mojna.

Launched in June 2020, Nordea 1 – Global Equity Market Neutral Fund experienced a loss of 2.8 percent in its first six months of operations, followed by a loss of 1.3 percent in 2021. After implementing changes to the factor hedging overlay shortly after its launch, the fund rebounded to gain 1.4 percent in the difficult market conditions of 2022, followed by a 1.9 percent gain in 2023 and a 3.3 percent gain in the first two months of 2024. Despite the strategy’s improving performance each year since its inception, Nordea Asset Management has opted to liquidate the fund. Jakob Nordestedt has departed from Nordea’s asset management group, with early intentions of establishing his own venture.

Nordestedt aimed to run a truly market-neutral equity strategy by eliminating exposure to various risk premia. His goal was to design a strategy where performance relied solely on alpha generation, remaining unaffected by market movements or factor exposures. Rather than setting a specific return target, Nordestedt emphasized maintaining a specific volatility level for the strategy. By targeting a yearly volatility of four percent for the fund, the strategy maintained a constant risk profile independent of market conditions.

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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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