Long-biased equity fund Impega, managed by Norwegian fund manager Petter Kvamme Jensen, had ranked as either the top-performing or among the top three performing Nordic hedge funds for most of 2025. November, however, proved exceptionally challenging, as markets underwent what Kvamme Jensen describes as “an aggressive rotation out of high-growth and AI-linked equities following more than a year of strong performance.” Despite a 17.5 percent decline in November, Impega retains a strong track record, having delivered an annualized return of nearly 28 percent since its launch in May 2023.

“The drawdown occurred amid an aggressive rotation out of high-growth and AI-linked equities following more than a year of strong performance.”

While Kvamme Jensen had anticipated and publicly stated that a correction was likely, and had intended to express that view through short positions in both indices and individual names, he acknowledges that “our positioning did not fully align with the intended timeline.” Formerly with Norges Bank Investment Management, where he spent 12 years, Kvamme Jensen reduced the portfolio’s U.S. exposure by 62 percent in early October, correctly anticipating the initial market decline. “However, exposure was rebuilt too early as the broader AI-driven rally continued to unwind. In turn, the second leg of the sell-off unfolded faster than expected,” he adds.

Despite continued strong fundamentals, particularly among large technology companies reporting record earnings and significant beats, market reactions were short-lived. “The positive news was absorbed within hours before indiscriminate liquidation across AI-linked names resumed,” observes Kvamme Jensen. “Market behaviour reflected a momentum-driven unwind rather than an orderly correction.” He adds that the fund’s losses were driven primarily by sector rotation, long-rate volatility, and sentiment-driven de-risking, rather than by any fundamental deterioration. Several high-quality large-cap industrial and technology holdings declined between 18 and 30 percent during the month.

“Market behaviour reflected a momentum-driven unwind rather than an orderly correction.”

The magnitude and speed of the drawdowns triggered Impega’s risk controls and downside protection mechanisms, resulting in stop-outs across several core positions simultaneously. As a consequence, the fund closed November near the market trough. “We have since exited lower-conviction positions to preserve liquidity and concentrated the portfolio around our highest-conviction assets,” says Kvamme Jensen. “We have already recouped a meaningful portion of the drawdown.” While he acknowledges that November’s loss will not be recovered immediately, Kvamme Jensen remains confident in the path forward. “We aim to return to all-time highs by the first quarter,” he says.

“We have already recouped a meaningful portion of the drawdown.”

Launched in May 2023, Impega was the second-best performing Nordic hedge fund in 2024, delivering a return of 54 percent. It had continued to rank among the top performers for most of 2025 until the November setback. Despite the sharp monthly decline, the long-biased long/short equity fund has generated an annualized return of 27.6 percent since inception.

“We intend to capitalize on increased volatility through a greater focus on short-term trading, historically our strongest source of alpha.”

Although November marked the worst monthly performance in the fund’s history, Kvamme Jensen views the return of volatility as constructive. Increased market volatility, he argues, creates opportunities for short-term trading, an area where Impega has historically generated its strongest alpha. “We intend to capitalize on increased volatility through a greater focus on short-term trading, historically our strongest source of alpha,” he says. 

As a relatively small and agile fund, Impega retains the flexibility to reposition quickly on both the long and short side. “That agility is a clear advantage in the environment we expect ahead,” Kvamme Jensen adds. “Progress will be rebuilt steadily, stone by stone, as we move into 2026.”