Stockholm (HedgeNordic) – The Nordic hedge fund industry is experiencing one of its strongest years on record, marked by seven consecutive months of positive performance and a 7.9 percent advance in the first five months of the year. The month of May contributed to this year-to-date advance with a 1.8 percent gain, primarily driven by strong performance from equity funds.

In May, eight out of the top ten performers in the Nordic Hedge Index were equity hedge funds, which, as a group, advanced 3.2 percent. Nordic equity hedge funds averaged a 9.3 percent gain over the first five months of 2024. Conversely, Nordic systematic trend-following CTAs, macro and managed futures vehicles within the CTA category experienced an average decline of 2.2 percent in May, yet closed the first five months of 2024 with a 14.5 percent gain. About 8.4 percent of this advance is attributable to the performance of Anna Fund, a Norwegian fund that employs a momentum strategy on Bitcoin futures.

Fixed-income, diversified, and multi-manager hedge funds posted gains of 1.9 percent, 1.3 percent, and 1.0 percent, respectively. Diversified funds, which include multi-asset, multi-strategy strategies along niche strategies, advanced 4.9 percent in the first five months of the year, while multi-manager vehicles gained 5.5 percent on average. Fixed-income hedge funds registered a 6.8 percent rise over the same period. Long-only equity managers with hedge fund-like characteristics, a category outside of the Nordic Hedge Index, saw a 5.7 percent average increase, extending their year-to-date advance to 14.6 percent.

The performance dispersion between the best- and worst-performing members of the Nordic Hedge Index remained unchanged month-over-month. In May, the top 20 percent of Nordic hedge funds achieved an average gain of 5.8 percent, while the bottom 20 percent incurred an average loss of 2.1 percent, representing a top-to-bottom dispersion of 7.9 percent versus 8.0 percent in April. In April, the top 20 percent recorded an average gain of 5.2 percent, with the bottom 20 percent seeing a 2.7 percent loss. About 83 percent of all funds with reported figures for May posted gains last month.

Top Performers in May

Activist fund Accendo Capital was last month’s best-performing member of the Nordic Hedge Index with a monthly gain of 16.5 percent. The fund’s performance was largely driven by solid gains from Hexatronic and Impact Coatings, which gained 30 percent and 40 percent, respectively. This gain brought Accendo’s year-to-date performance in positive territory at 7.8 percent.

Adrigo Small & Midcap L/S also excelled in May, posting a 10.9 percent gain and reaching an advance of 22.4 percent for the year. A significant contributor to its May performance was the biopharmaceutical company Calliditas, which received a public cash offer from the Japanese firm Asahi Kasei. The offer reflects a premium of 83 percent over the closing price prior to the announcement. Proxy Renewable Long/Short Energy Fund followed suit with a 10.5 percent gain in May, though the energy transition-focused fund ended the first five months with a 2.3 percent decline.

Alcur Fonder’s long-biased long/short equity fund, Alcur Select, enjoyed a strong May and start to 2024. The advance of 9.1 percent in May contributed to its position among the top three best-performing hedge funds in the Nordics this year with a 25.8 percent gain. Cleaves Shipping Fund, the shipping-only long/short equity-focused hedge fund under the umbrella of Oslo-based Cleaves Securities, is also enjoying a strong start to 2024 after gaining 18.1 percent in the first five months of the year, including a 7.6 percent gain in May.

Top Performing Long-Only Equity Funds

In September, HedgeNordic introduced a new sub-strategy category to the Nordic Hedge Index: Equity Long-Only (ELO). This category is home to funds that would fall short of qualifying as a hedge fund due to their long-only trading approach but exhibit habitual characteristics of a hedge fund strategy (e.g., leverage and derivatives usage, portfolio concentration, fee structure, a spin-off of a long/short strategy, and absolute return objectives, among others).