When HedgeNordic spoke with Tommi Kemppainen in early 2019, the CEO of Helsinki Capital Partners outlined a defensive positioning for the multi-strategy fund HCP Black, warning of recession risks driven by excessive indebtedness and ultra-low interest rates. More than five years on, those views have paid off handsomely. HCP Black is on track for its best year since inception, advancing 17 percent year-to-date with one quarter still to go, as several positions rooted in those earlier convictions have come to fruition.

A Statistically Exceptional Year

From a statistical perspective, based on HCP Black’s historical volatility since its 2009 launch, the fund’s annual returns are typically expected to fall within a range of plus 15 percent to  minus 5 percent with a 95 percent confidence interval. “Looking at the history, there was one year at  minus 7 percent, which fell outside that range, and another year at around plus 14 percent,” says Kemppainen. “This year, we are heading toward plus 20 percent, not the most probable outcome, but certainly within the range of possibility.”

“This year, we are heading toward plus 20 percent, not the most probable outcome, but certainly within the range of possibility.”

This outcome, sitting at the upper bound of HCP Black’s historical return range, is not coincidental. It traces back to the strategic positioning HCP Black adopted several years ago in anticipation of a shift away from the era of zero interest rates. “Because of our view in 2019, we held no long-maturity fixed income at all,” says Kemppainen. “Having a normally upward-sloping yield curve again is healthy and positive. If the zero level of interest rates was once the main story, we don’t think it is anymore,” he emphasizes. “The massive amount of quantitative easing is now behind us, and the inflation that finally emerged felt like it took ages to become visible.”

Multiple Return Drivers

Kemppainen continues to see lasting consequences from the long era of cheap money. “The risk of prolonged inflation remains because of the long period of quantitative easing,” he explains. “That’s still part of this big, slow-moving theme of excessive debt – a challenge the world economy still needs to digest.” In this environment, HCP Black’s strategy has been anchored around real assets and inflation protection.

HCP Black’s portfolio is built from multiple, uncorrelated components, including allocations to sister funds – HCP Quant, HCP Focus, and HCP Bricks – alongside exposures to event-driven opportunities, tail-risk hedges, precious metals, and thematic investments such as nuclear energy. This diversification has been instrumental in this year’s strong performance. “Different parts of the portfolio have performed at different times this year, and those parts are largely unrelated,” Kemppainen explains.

“The risk of prolonged inflation remains because of the long period of quantitative easing. That’s still part of this big, slow-moving theme of excessive debt – a challenge the world economy still needs to digest.”

The top contributor in 2025 has been the event-driven bucket, primarily consisting of long positions in European banks. “That segment has been our best performer this year,” says Kemppainen. “It was double in size at the beginning of the year, and we’ve since been reducing it. Our thesis was that banks that survived the zero-interest-rate period would thrive once the yield curve normalized and that really paid off.”

The next best performers have been the fund’s nuclear energy and precious metals exposures. “Event-driven positions in banks, gold and silver, and nuclear power: these are very different themes, yet all performed strongly this year,” he summarizes.

Real Assets and Valuation Plays

HCP Black also holds a sizeable allocation to HCP Bricks, a fund managed in cooperation with Cobbleyard Real Estate that focuses on real estate opportunities in Finland’s largest cities and in Stockholm. According to Kemppainen, market conditions in Finland have created a particularly attractive entry point. “Right now, we believe this is the best opportunity since 1993 to purchase commercial real estate in Finland.”

Prices for commercial properties have fallen to roughly half of their 2020-2021 levels, creating what he describes as a “really steep drop” in valuations. “What’s interesting this time is that the correction is concentrated in the commercial sector, not in residential,” he adds. “Investors can now access top-tier assets at the very best addresses – not the second best, but the absolute best – at very attractive prices.”

“Right now, we believe this is the best opportunity since 1993 to purchase commercial real estate in Finland.”

HCP Black also maintains allocations to its equity-focused sister funds, HCP Focus and HCP Quant. While the multi-strategy fund has historically held a higher allocation to the growth-oriented HCP Focus Fund, it now tilts toward the systematic, value-driven HCP Quant Fund in what Kemppainen describes as a valuation play. “With deep-value stocks, it’s hard to imagine getting stuck in a difficult situation for long when entering at such low valuation levels,” he explains. “Our exposure to Quant is now more than double that of Focus. As a valuation call, it once again looks like deep-value stocks could gain popularity and this year, they already have.”

As 2025 draws to a close, HCP Black’s strong performance underscores the value of patient, conviction-driven positioning. By combining macro awareness with a diversified set of independent return drivers – from event-driven opportunities and real assets to systematic equity exposure – the fund has demonstrated resilience across shifting market regimes.