Rhenman’s global equity hedge fund slips deeper into red after energy and financials stumble

Financial data

Rhenman & Partners Asset Management saw its global equity hedge fund tumble in July, as losses in energy and financials positions outweighed gains in information technology stocks.

The Rhenman Global Opportunities Fund - a long/short global equity hedge fund strategy which trades across sectors, with a focus on value-oriented companies - shed 3 per cent in its main SEK-denominated share class last month. Its euro share class meanwhile fell 1.64 per cent.

IT names generated positive contributions in July, with Ericsson and Qualcomm the best overall performers.

But monthly returns were ultimately hamstrung by losses in bets on Chevron and ExxonMobil, the firm said in a performance update this week, with the latter registering its biggest ever quarterly loss.

Five months of negative performance out of seven this year has left the Rhenman Global Opportunities Fund down more than 21 per cent in 2020 overall.

Despite the setback, the firm maintains that the fund holds “significant growth potential going forward”, pointing to better-than-expected quarterly earnings in certain sectors that hint at “the intrinsic quality” of companies in its portfolio.

In particular, the note highlighted certain e-commerce and IT names which have benefited from lockdowns and closures in recent months.

While the EUR700 million Stockholm-based firm is best known for its healthcare-focused flagship fund, Rhenman Healthcare Equity Long/Short, which trades a range of pharmaceutical, biotech, and med-tech stocks, the Global Opportunities strategy has a much broader market focus.

Led by Staffan Knafve, the fund has an overall long bias – going long in stocks considered to have fundamentally attractive valuations and shorting those names overvalued in comparison to their growth prospects.