Swedish hedge fund Bodenholm shutters after Brummer pulls the plug

Pulling the plug

Swedish hedge fund firm Bodenholm Capital is to close after Brummer & Partners, one of the major investors in its funds, announced its decision to withdraw capital.

Bodenholm One, a long/short equity hedge fund whose portfolio is built around fundamental stock analysis, is one of several strategies offered on Brummer & Partners’ flagship Brummer Multi-Strategy vehicle.

BMS has invested in Bodenholm since the latter’s inception in September 2015, and is understood to have held a stake of more than 40 per cent.

“For some time we have had a dialogue with Bodenholm about the fund’s management and risk where it has now emerged that the manager and parts of the management organisation intend to leave Bodenholm,” Mikael Spångberg, Brummer’s CEO and portfolio manager, said on Thursday.

As a result, Brummer will redeem its entire holding in the Bodenholm One fund on 15 April. 

Bodenholm, which managed a reported USD511 million in assets, has had an average annual return of more than 4 per cent since inception, with a low correlation to the stock market. Its Bodenholm One, Bodenholm Two and Bodenholm Master funds are all set to be liquidated.

“We would like to thank you for the confidence you have shown us during these years,” Bodenholm’s CEO Erik Orving and CIO Per Johansson said in a statement.

Stockholm-based Brummer said it continuously evaluates the funds BMS is invested in while the process of identifying and evaluating new management teams is ongoing.

Last year, the Swedish hedge fund pioneer redeemed its entire holding in Nektar Asset Management, Patrik Olsson’s USD1 billion global macro hedge fund. Nektar, which had been Sweden’s longest-running hedge fund having launched in 1998, had suffered a sustained performance slump before its closure last May.

Following the redemption in Bodenholm, Brummer – which was founded in 1995 - remains invested in nine funds: AlphaCrest, Arete, Black-and-White, Florin Court, Frost, Lynx, Lynx Constellation, Manticore and Observatory.

Brummer’s flagship multi-strategy fund of funds vehicle BMS posted losses of 3.5 per cent earlier this month, and is down some 3 per cent since the start of 2020.

Spångberg and founder Patrik Brummer said markets are set to be characterised by “great concern and high volatility” following recent economic shocks as a result of the Covid-19 pandemic.

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