Proxy Renewable Long/Short Energy gained 44 percent through the end of May, propelled by a 14-month rally in the renewable energy investment universe that began in April 2025. As the sector entered a period of consolidation over the summer, one the investment team describes as “both healthy and inevitable,” the long-biased long/short equity fund surrendered some of its earlier gains in June and July. Even so, the fund remains among the ten best-performing Nordic hedge funds this year.
“Following a remarkable 14-month rally in our investment universe, from April 2025 through May 2026, which saw the sector appreciate by approximately 150 percent in U.S. dollar terms, we believe a period of consolidation had become both healthy and inevitable,” writes the investment team at Proxy P, led by Jonas Dahlqvist. “We are not market timers and couldn’t say when or how a correction would evolve. But from a fundamental standpoint, we are not surprised.”
“Following a remarkable 14-month rally in our investment universe, from April 2025 through May 2026, which saw the sector appreciate by approximately 150 percent in U.S. dollar terms, we believe a period of consolidation had become both healthy and inevitable.”
According to the team, the recent weakness in renewable energy equities has been closely tied to the broader AI trade. “A growing number of investors have questioned whether the unprecedented level of AI-related capital expenditure can be justified,” the team explains. “While this concern has clearly influenced market sentiment, we believe it overstates the underlying risk.”
Instead, the managers argue that the correction has been driven primarily by technical and macroeconomic factors rather than any deterioration in the sector’s fundamentals. “In our view, the recent correction has been driven primarily by stretched valuations, significant accumulated gains, and a more hawkish shift in Federal Reserve expectations, rather than by any deterioration in industry fundamentals,” they write.
While acknowledging that “it is impossible to determine with certainty whether the market has established its ultimate low,” the team believes most of the adjustment has already taken place. “Following a decline of roughly 25 percent from peak to trough, valuations have become considerably more attractive and, in many cases, once again offer compelling long-term investment opportunities,” they conclude.
“Following a decline of roughly 25 percent from peak to trough, valuations have become considerably more attractive and, in many cases, once again offer compelling long-term investment opportunities.”
Since its launch in late 2018, Proxy P Management has managed Proxy Renewable Long/Short Energy, a directional long/short equity strategy focused on renewable energy and energy technology. The fund has delivered an annualized return of 15 percent since inception.
Earlier this year, the firm expanded its product offering with the launch of Proxy Power Utilities, a long-only strategy focused on power utilities. The fund is designed to provide a lower-risk, income-oriented profile while retaining exposure to the long-term structural growth in global electricity demand. While Proxy Renewable Long/Short Energy gave back some of its strong early-year gains during the summer correction, Proxy Power Utilities has demonstrated notable resilience since its February launch, remaining in positive territory through the challenging market conditions of June and July.
