In addition to its high-profile equity funds, stock-picking boutique Protean Funds has quietly managed a market-neutral version of its opportunistic hedge fund, Protean Select, since December 2023 for a U.S.-based investor. A recent allocation from a European institutional investor has now led the team to close the strategy to new subscriptions to protect its ability to generate returns.
“Fingers crossed we can keep delivering reasonable returns, with reasonable risk, for an unreasonably long time,” says Pontus Dackmo, Investment Manager and CEO at Protean Funds. Designed exclusively for institutional investors, Protean Market Neutral builds on the same stock-picking philosophy as Protean Select within a market-neutral framework. The strategy focuses on highly liquid Nordic equities, deliberately excluding small- and micro-cap names, and aims to deliver stable, uncorrelated returns with low volatility and limited drawdowns.
“Fingers crossed we can keep delivering reasonable returns, with reasonable risk, for an unreasonably long time.”
Pontus Dackmo, Investment Manager and CEO at Protean Funds.
“We are pretty satisfied with the type of returns we have created so far in Market Neutral: low volatility, shallow drawdowns that we have recovered quickly, a very diversified portfolio, limited correlation to other similar strategies across the globe, and high idiosyncratic risk,” the team wrote in a letter to investors during the summer. The strategy serves as a market-neutral counterpart to the long/short equity fund Protean Select but, as the team emphasizes, “it does not infringe much on the flexibility of the Select fund, nor does it have more beneficial terms.” Protean Select, which celebrated its three-year anniversary in May this year, remains open to new investments.
Protean Funds was established in January 2022, launching its equity hedge fund, Protean Select, later that May. Managed by founders Pontus Dackmo and Carl Gustafsson, Protean Select is a returns-focused long/short equity fund investing across the Nordic region with the goal of compounding capital steadily while avoiding major drawdowns. Since inception, the fund has delivered an annualized return of around 9 percent with volatility of 5.7 percent, translating into a strong Sharpe ratio. In addition to its hedge fund strategies, Protean also manages a long-only small- and mid-cap equity fund, as well as the newer UCITS fund Protean Aktiesparfond Norden run by Richard Bråse.
