|Year||Fund||Management Company||Portfolio Manager|
|2021||Borea Utbytte||Borea Asset Management||Magnus Vie Sundal|
|2020||Frost||Frost Asset Management||Martin Larsén and Anders Augusén|
|2019||HP Hedge Fixed Income||HP Fondsmæglerselskab||Henrik Fournais|
|2018||SEB Eureka Fixed Income Relative Value||SEB||Bo Michael Andersen|
|2017||Asgard Credit Fund||Momas Advisors||Daniel Vesterbaek Pedersen|
|2016||Scandinavian Credit Fund I||Skandinaviska Kreditfonden AB||Fredrik Sjöstrand|
|2015||Elementa||Elementa Management AB||Marcus Wahlberg|
Rookie of the Year
Since 2015, one of the categories celebrated at the Nordic Hedge Award is the most promising new launch among Nordic hedge funds.
Hedge funds considered for the “Rookie of the Year” award of a given year are launched during the rolling 12-month period through the end of September of that year. Funds launched later than September of that year will qualify for next year’s “Rookie of the Year” award.
Funds must be listed in the Nordic Hedge Index and meet the criteria required for such listing. There will be no minimum / maximum requirement for assets under management to be considered.
Unlike the other regular categories, where HedgeNordic relies on a quant model and a jury board of representatives of asset owners and allocators to select the winners, the “Nordic Hedge Fund Rookie of the Year” is determined by fellow fund managers using simplified ranking procedure, making this a prized peer award.
A jury put together of the former winners of the Nordic Hedge Award and fellow fund managers will, based on a questionnaire, determine the “Rookie of the Year.”
Historic Rookies of the Year
2021 Rookie of the Year
The previous five winners of the “Rookie of the Year” award were all fixed-income managers. For the second time since the “Rookie of the Year” category debuted at the 2015 Nordic Hedge Award, an equity-focused hedge fund took home the prize for the most promising new launch. Norwegian Borea Utbytte was voted as the 2021 Rookie of the Year.
The outbreak of the Covid-19 pandemic triggered a violent market crash back in early 2020, which, assuming perfect foresight, presented a dearth of attractive investment opportunities across many asset classes. Norwegian asset manager Borea Asset Management swiftly launched a special fund in September of that year to capture a set of attractive risk-reward opportunities within the Norwegian banking sector. That fund, Borea Utbytte, was the best-performing member of the Nordic Hedge Index in 2021 with a full-year return of 61.8 percent.
Structured as a Norwegian special fund, Borea Utbytte has a broad mandate on paper, but not in practice, according to portfolio manager Magnus Vie Sundal. “While we aim to retain flexibility, we also aim to be a boring fund most of the time. We like to compare ourselves to the “tortoise and the hare,” said Sundal. “We are long-only probably 95 percent of the time, looking to capture the benefits of long-term exposure to Norwegian macro risk,” continued the portfolio manager.
The special fund structure enables the team running Borea Utbytte to leverage up to 150 percent of the fund’s assets under management. “We can borrow up to half of our assets under management, but in normal times, we run with a net market exposure of between 115 percent to 120 percent,” said Sundal. Although Borea Utbytte was initially put on the market as an opportunity-grabbing fund, there is both short-term and longer-term return potential in the fund and its sector focus. “Norwegian savings banks have been important pillars in our society for the past 200 years. At the same time, the banks have been good at streamlining, and have for a long time delivered solid returns,” according to Sundal.
2021 Nordic Hedge Award Jury Board
2020 Rookie of the Year
Prior to the 2020 Nordic Hedge Award, four of the five previous winners of the “Rookie of the Year” award were fixed-income vehicles. 2020 was no exception. Frost, a fixed-income relative value fund investing in government, covered and municipal bonds across Scandinavian markets, primarily focusing on Sweden, was crowned as the 2020 “Rookie of the Year.”
“We at Frost feel honored being awarded the prize Rookie of the Year 2020, especially as it was a year filled with great challenges,” CIO Martin Larsén, who co-launched fixed-income relative value fund Frost alongside Anders Augusén, commented on the distinction. “Given that both Anders and I have been risk-takers for over 20 years each, rookie is maybe not the most obvious label.”
In May of 2019, Sweden’s oldest hedge fund – Nektar – closed its doors after 21 years. Some of Nektar’s team led by Martin Larsén, Anders Augusén and Johanna Ahlgren got back together to launch a new fund – Frost – that would run one of Nektar’s successful sub-strategies: fixed-income relative value. “The fixed-income trading at Nektar performed well over the years, and Anders and I did not see any reasons not to continue that going forward,” Martin Larsén told HedgeNordic.
“When looking at fixed-income relative value, it is simply the relative pricing of two or more instruments or rate products,” explained Augusén. “What we construct is a portfolio consisting of many different combinations that we like” to exploit a given market anomaly, continued Augusén, who served as a portfolio manager at the now-closed Nektar for over ten years. “We express each anomaly in three to four different ways,” further explained Larsén, “which means we have 30 different positions on average.”
2020 Nordic Hedge Award Jury Board
2019 Rookie of the Year
Crowned as the 2019 Rookie of the Year, HP Hedge Fixed Income is one of the most prominent launches in the universe of Danish-originating fixed-income hedge funds focused on the domestic mortgage market. Launched in October 2018, the Copenhagen-based hedge fund seeks to identify and take advantage of market moves exacerbated by the reduced capacity of risk absorption of market-making banks.
In a comment on the distinction, CEO and Chief Portfolio Manager Henrik Fournais told HedgeNordic that “receiving an award in the fund’s first year is, of course, both an honor but also a testimony to the professionalism of the team behind the fund and the work that has been put into creating a unique fund to the benefit of clients.” Fournais added that “it is an honor to get recognition especially in a year with many other new hedge funds.”
The primary strategy employed by HP Hedge Fixed Income involves the purchase of Danish callable mortgage bonds below par and non-callable mortgage bonds. The team at HP Fonds predominantly seeks to “make a profit on the spreads between Danish mortgage bond yields and the fund’s borrowing rate.” This carry trade approach involves borrowing at low rates and investing in higher-yielding mortgage bonds.
Depending on the set of opportunities, the fund can also invest in Swedish Böstader property-backed bullet bonds and floaters, senior non-preferred bonds issued by Danish and other Nordic systematically important financial institutions (SIFIs), as well as European government and corporate bonds.
2019 Nordic Hedge Award Jury Board
2018 Rookie of the Year
The 2018 Rookie of the Year award went to SEB Eureka Fixed Income Relative Value Fund. The fund managed by CIO Bo Michael Andersen and portfolio manager Tore Davidsen predominantly invests in the Scandinavian covered bond market. The strategy may not be unique, but SEB Eureka’s approach to investing differs quite a bit.
Whereas “an important pillar of our strategy involves holding leveraged positions in mispriced covered bonds,” the active management of the covered bond portfolio and the use of other relative-value strategies such as relative-value trades in Danish callable mortgage bonds are essential pieces of the fund’s investment approach too. As Andersen explains, “we are trying to run a more diversified approach by employing a wide range of strategies that are uncorrelated in nature.”
“Everyone in the portfolio management team of SEB Eureka Fixed Income Relative Value is happy and proud to win HedgeNordic’s Rookie of the Year award,” says Andersen, who has been building up experience in fixed-income markets since 1996 and had tested the strategy behind SEB Eureka before the launch. “Given the challenging market environment for a number of hedge funds globally, we are happy to see that our Scandinavian Fixed Income Relative Value Strategy worked out well in the volatile market environment in 2018.”
2018 Nordic Hedge Award Jury Board
2017 Rookie of the Year
The team running the Rookie of the Year 2017, Asgard Credit Fund, is in fact well known at the Nordic Hedge Award. The winner’s sister fund won four of the last five top spots as “Best Nordic Fixed Income Hedge Fund”, and twice took the trophy as “Best Nordic Hedge Fund Overall” back to Copenhagen.
Asgard’s newest fund – Asgard Credit Fund – invests in corporate credits worldwide, and currently has most of its exposure in US corporate credit, which offers higher yields than European or Nordic names. “Moma has also turned cautious on European credit because the European Central Bank will at some stage stop buying credit,” said CEO Birger Dirhuus.
Asgard Credit Fund made 7.29% in 2017, mainly from credit spreads on CDS positions, which have averaged net exposure of 370% since the fund started. Shorts unsurprisingly did not work well in 2017, and nor did a spread trade going short of European credit versus long of US credit. Manager, Daniel Vesterbaek Pedersen, had a long, strong track record from PFA Pension, including the 2008 crisis, before being hired by Moma.
2017 Nordic Hedge Award Jury Board
2016 Rookie of the Year
The Rookie of the Year 2016 went to the team behind direct lending fund Scandinavian Credit Fund I, which is managed by Skandinaviska Kreditfonden. The fund engages in the private debt market, providing capital to companies with short- and medium-term financing needs.
Its first trading month was January 2016, the first and only down month for Scandinavian Credit Fund I as the fund has only shown positive performance every month after January of 2016. For the full year 2016, the fund showed a 6.8% return with very low volatility. Scandinavian Credit Fund I provides access to a high-yield investment product with low risk that is not normally available to private investors. The fund offers short- to medium-term direct loans to small- and medium-sized companies for a variety of purposes, including business expansion, inventory or equipment purchases, working capital, and refinancing.
CIO and Portfolio Manager Fredrik Sjöstrand was flattered that the fund was recognized already as it is still early days. “We have only just started, but this is a first recognition that we are on the right track, we hope to revisit the winner’s podium for many years to come,” said Sjöstrand on winning the award.
2016 Nordic Hedge Award Jury Board
2015 Rookie of the Year
Swedish long/short equity fund Elementa, launched in early March 2015 by fund manager Marcus Wahlberg, received the “Rookie of the Year” award at the Nordic Hedge Awards 2015. Elementa invests in small and mid-cap stocks active in the Nordics using deep fundamental research to pick companies that Wahlberg believes to have tangible profits and cash flow upside.
In 2015, the rookie fund delivered an impressive 15 percent return and was the only fund in the universe of Nordic hedge funds to only report positive trading months. This is even more astonishing given this was the first year of the fund’s life when managers are most likely to be distracted by the mechanics of setting up a business. Markets were also not helpful, as the year was turbulent from the start.
Wahlberg started the fund with PSG Capital, a Stockholm-based micro-cap long-only fund manager that incubated Elementa on its platform. This gave Wahlberg the opportunity to create his own management company, Elementa Management, while establishing a track record for the fund. He moved the fund the summer of 2016 to his newly launched management company.