Stockholm (HedgeNordic) – In August 2022, Danske Bank Asset Management launched a hedge fund designed to capture ‘true’ alternative risk premia as compensation for actual risk rather than behavioral-based or data-mined premia. With 22 positive months out of its first 25 and a Sharpe ratio above 2.0, Danske Invest Global Alternative Opportunities has drawn more institutional interest, recently securing a significant institutional mandate. Danske Bank’s other multi-asset, multi-strategy fund focused on volatility-related strategies has also experienced significant investor interest, with its assets under management increasing by over €150 million this year to approach €500 million.
Starting with less than €100 million two years ago, Danske Invest Global Alternative Opportunities (GAO) has grown to manage over €430 million as of mid-September, up from €385 million at the mid-point of the year. According to the team at Danske Bank Asset Management, the multi-asset hedge fund has been gaining significant traction, with its strong performance drawing attention from institutional investors. “Generally, we are experiencing increasing interest in our multi-asset hedge funds, where we have gradually established a very strong market position,” confirms Thomas Gade (pictured), Head of Quant & Overlay at Danske Bank Asset Management.
“Generally, we are experiencing increasing interest in our multi-asset hedge funds, where we have gradually established a very strong market position.”
Thomas Gade, Head of Quant & Overlay at Danske Bank Asset Management.
Danske Bank’s GAO strategy, a product of a multi-team effort spearheaded by Chief Portfolio Manager Markku Vartiainen, seeks to capture alternative risk premia across equity and volatility markets, as well as interest rate, inflation, credit, and currency markets. Co-managed by Vartiainen and Aleksander Koldborg Tetzlaff, the fund is currently enjoying 11 consecutive months of positive performance. After gaining 3.3 percent in the final months of 2022, the fund delivered 6.6 percent in 2023 and an additional 4.0 percent year-to-date through the end of August. This performance translates to an annualized return of 6.7 percent since inception, with low volatility in returns driving a Sharpe ratio above 2.0.
As suggested by Thomas Gade, Danske Bank Asset Management’s other multi-asset, multi-strategy fund, which focuses on volatility-related strategies, is also performing well and attracting investor interest. Danske Invest Global Cross Asset Volatility gained 7.0 percent in the first eight months of 2024, following a 10.3 percent return in 2023, after a slight decline of 0.7 percent during the challenging market conditions of 2022. The fund now oversees €495 million as of mid-September, up from €457 million at the end of August and €332 million at the close of 2023.
