Swedish hedge fund pioneer Brummer sees April gains across credit, relative value and macro

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Brummer & Partners, a long-running Swedish multi-strategy hedge fund firm, saw its flagship Brummer Multi-Strategy vehicle up marginally in April, as solid gains across its long/short credit, systematic equity, relative value and macro strategies were offset by sharp losses in tech-focused long/short equity trades.

The Brummer Multi-Strategy multi-manager fund - which invests in a range of single-strategy hedge funds– generated returns of 0.1 per cent, while the Brummer Multi-Strategy 2xL (BMS 2xL) rose 0.2 per cent.

Observatory, the long/short credit fund, was up 4.2 per cent, powered by earnings from new issues and relative value positions. However, Observatory remains down almost 4 per cent year-to-date. AlphaCrest, the systematic equity fund, advanced 4.7 per cent amid the continued high volatility, generating strong market neutral alpha. It remains up some 0.7 per cent since the start of 2020.

Meanwhile, the Hong Kong-based macro fund Arete rose 3.5 per cent for the month, making gains from relative value positions both in equities and currencies. Arete is now up 3.8 per cent since the start of 2020.

Trend-following strategy Lynx made 2.3 per cent, taking profits in most asset classes, with short bets on the oil sector being the largest contributor to performance.  Elsewhere, the relative value strategy Frost (3.5 per cent), machine learning strategy Lynx Constellation (2.1 per cent) and Manticore, a long/short equity fund, also each notched up positive returns to Brummer’s strategy.

On the flipside, Black-and-White – a long/short equity strategy that trades trends in technology and TMT names - was caught out by sharp rebounds in stock markets, leaving it down 7.2 per cent in April, and almost 4 per cent over the four-month period, which ultimately dragged on performance across the Brummer Multi-Strategy fund.

Florin Court, the systematic trend follower, was also down some 0.9 per cent.

The Stockholm-based hedge fund pioneer, which was established in 1995, said April’s increasingly weak statistics underlined the extent of the financial damage caused by the coronavirus pandemic, pointing to historic US industrial production slides and unprecedented oil market volatility.

“Despite these negative forecasts, most global stock exchanges rose as central banks increased stimulus measures and more countries began to prepare to ease restrictions to mitigate the negative economic effects,” Brummer noted.

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