After a challenging first eight months of the year, Joakim Hannisdahl’s shipping-focused long/short equity fund, Gersemi Shipping Fund, has staged a strong recovery since late summer, gaining 7.9 percent in October alone. The month marked the fund’s second-strongest monthly performance since its launch in mid-2023. Hannisdahl attributes the rebound to a shift towards shorter-term trading, allowing the fund to capitalize on volatility in shipping markets while reducing exposure to more uncertain medium- and long-term positions.
“Medium- to long-term investing has proven increasingly challenging since the US presidential elections in 2024 and has created a drag on our performance year to date,” Hannisdahl explains in a letter to investors. “We have thus scaled back market exposure and focused more on short-term trading. The strong gains for the fund in October reflect this reallocation of capital and also how much value our proprietary models can add in a favourable trading environment.”
“Medium- to long-term investing has proven increasingly challenging since the US presidential elections in 2024 and has created a drag on our performance year to date. We have thus scaled back market exposure and focused more on short-term trading.”
Joakim Hannisdahl
He describes October as a particularly attractive environment for the strategy. “Volatility has persisted, but it has been driven by fundamentals on the ground rather than news headlines and social media posts, enabling us to utilize our comparative advantages in modelling, information flows and extensive experience.”
Trading Tanker Stocks and Dry Bulk Freight
Oil tanker stocks provided some of the fund’s most profitable opportunities during October. The strategy involved buying shares following a late-September decline, selling into the subsequent rally and then re-establishing positions after prices retreated. “We added significant long exposure during the dip in late September and sold everything at the peak in mid-October, realizing a return of approximately 20 percent over around 12 business days,” says Hannisdahl.
“We added significant long exposure during the dip in late September and sold everything at the peak in mid-October, realizing a return of approximately 20 percent over around 12 business days.”
Joakim Hannisdahl
The fund subsequently bought back a substantial long position just a few days later, when tanker stocks were trading approximately 13 percent below their recent peak. It then exited these positions in late October and early November, securing further gains while limiting the time the capital was exposed to the market.
Gersemi Shipping Fund also locked in significant gains from a dry bulk freight forward agreement (FFA) trade. FFAs are financial contracts that allow investors to take positions on future freight rates without trading physical shipping capacity. In this case, the fund profited from falling Capesize freight rates after they peaked in September. Capesize vessels are large bulk carriers primarily used to transport commodities such as iron ore and coal. “We also locked in major gains on a net-neutral dry bulk FFA trade during October, monetizing the falling Cape spot rates from the peak in September while taking on limited exposure risk,” Hannisdahl says.
Despite gaining 10.4 percent across September and October, Gersemi Shipping Fund remains down 9.6 percent for the year through the end of October. Since its launch in mid-2023, the fund has generated a cumulative return of 18.5 percent.
