| An anomaly among Nordic hedge funds, Scandium strikes again |
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| 22/07/2007 | |
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Nordic hedge funds struggled in June with a composite return of 0.21%, trailing the Greenwich Global Hedge Fund Index, which posted preliminary results of 1.07%. The Hennessy Hedge Fund Index gained 0.88% for June, for a year-to-date return of 8.78%. Sweden, with its high concentration of equity funds, performed the worst with 19 of 37 funds that have reported announcing negative returns, according to HedgeNordic. Finland had the strongest results, posting a 1.20% gain aided by a 9.11% return by equity fund Altos. Another historically strong performer was the Danish fund-of-hedge-fund Scandium Asset Management, which in early July launched the first Nordic open-ended fund-of-hedge-funds listed on the Copenhagen stock exchange. Scandium, which posted a return of 1.2% in June, launched the fund after some of its investors demanded a more liquid product, says CEO Casper Hallas. Buyers of the vehicle pay the same fees as an investor in the fund, but they can trade it more like equity. Hallas acknowledged the difficult market environment for Nordic funds in June. "About 45-50% of the hedge-fund industry is represented by long-short or directional strategies which are more long-biased, so there is more beta than perceived in these hedge funds and the market is over-represented," he says. "We try to be broader in our exposure. We are entirely in alternatives, whether these are equity-based or fixed income strategies, statistical arbitrage, Asset Backed Lending (ASL) or Private Investment in Public Equities (PIPES). Our effort is to eliminate beta." The strategy has worked so far. In May 2006, 25 Nordic fund-of-hedge-funds posted negative returns. One of the few exceptions was Scandium which posted positive results. Last month, 12 out of 19 Danish funds posted positive returns but the composite return was 0.4%, according to HedgeNordic. VB |
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