Stockholm (HedgeNordic) – There is a Danish saying that goes, “7 years, Niller, then you know a thing or two,” suggesting that seven years of experience amounts to a wealth of expertise. It’s a fitting expression for Danish fixed-income boutique CABA Capital, which is celebrating the seventh anniversary of its first hedge fund, CABA Hedge. “Seven years later, you do know a thing or two,” jokes Mette Østerbye Vejen, co-founder and CEO of CABA Capital.
“Seven years ago, we launched our first fixed-income hedge fund, CABA Hedge KL, together with Nykredit Portfolio Administration. We were three colleagues and we sat in a small room on Gl Køge Landevej,” recalls Østerbye. “We were full of anticipation and had a go-getter attitude. Seven years later, we know a thing or two – it was fortunate we didn’t fully know what we were getting into at the time,” she adds. Seven years later, the Danish boutique operates with a team of six from a different office, offering a product range that includes three investment vehicles.
“Seven years later, you do know a thing or two.”
Mette Østerbye Vejen, co-founder and CEO of CABA Capital.
CABA Hedge, launched in July seven years ago, employs a relative-value approach to harvest structural risk premiums from Scandinavian mortgage bonds. After a challenging 2021 and 2022, marked by low double-digit losses, CABA Hedge has embarked on a solid recovery in late 2022, gaining 12.7 percent in 2023 and an additional 14.9 percent in the first half of 2024. The solid performance rebound brought the hedge fund’s assets under management close to the DKK 1 billion threshold.
In mid-December 2022, the firm introduced CABA Flex, a new fund employing a buy-and-hold strategy within a three-year maturity structure to capitalize on historically elevated spreads in the Scandinavian mortgage bond markets. After reaching a cumulative return of 30 percent net of fee in its 19 months of operation, CABA Capital recently launched a second closed-end structured fund with a similar three-year term and an anticipated return target of 25 to 30 percent after fees. Like its predecessor, CABA Flex2 employs extensive leverage to enhance the return potential from the yield spread between AAA-rated Scandinavian mortgage bonds and government bonds.
“There have been ups and downs, and it hasn’t always been easy, but these seven years have been both fun and incredibly educational.”
Mette Østerbye Vejen, co-founder and CEO of CABA Capital.
“There have been ups and downs, and it hasn’t always been easy, but these seven years have been both fun and incredibly educational,” reflects Østerbye. “Now we know a thing or two – but we are still full of anticipation and courage. I’m excited to see what the next seven years will bring for CABA Capital.”
