Swedish hedge fund pioneer Brummer steers through “great concern and high volatility” with double-digit annual return

Tight gap

Stockholm-based multi-strategy hedge fund firm Brummer & Partners’ flagship vehicle gathered further pace towards the end of the year, as strong performances in its stock-picking and trend-following funds during December powered the long-running manager into double-digit territory for the year.

The Brummer Multi-Strategy (BMS) fund – which invests in a range of single-strategy hedge funds – was up 4.6 per cent last month, building on its 3.1 per cent November advance, to bring its 2020 return to 12.6 per cent.

Meanwhile, the Brummer Multi-Strategy 2xL twice-levered offering was up more than 24 per cent for the year, following a December gain of 8.9 per cent, according to the firm’s year-end estimates.

Earlier in the year, Mikael Spångberg, CEO and portfolio manager, and founder Patrik Brummer had warned that markets would be underpinned by “great concern and high volatility” following the economic shock triggered by the coronavirus pandemic.

Black-and-White and Manticore, two long/short equity hedge fund strategies in the BMS vehicle, were among its star performers during the final month of last year. Black-and-White generated a 9.7 per cent monthly rise, while Manticore was up 6.2 per cent.

Overall, both Manticore and Black-and-White made an estimated 35.7 per cent from stock market bets over the last 12 months, Brummer said on Tuesday.

Trend-following strategies also brought successes for the long-running Swedish investment pioneer as 2020 drew to a close.

Systematic managed futures fund Florin Court was up around 6.5 per cent for the month, while trend follower Lynx also scored an 8.2 per cent gain in December.

Discretionary macro fund Arete successfully navigated an at-times-turbulent year in macro trading with an 11.6 per cent annual return, having added 2 per cent in December.

Machine-learning strategy Lynx Constellation rose 2.8 per cent last month, while Observatory made almost 1 per cent from long/short credit trading in December.

On the downside, two of the BMS strategies finished the month in marginally negative territory.

Fixed income relative value fund Frost felt a chill with a 0.6 per cent slide in December, though the strategy advanced 10.6 per cent over 12-month period. Similarly, AlphaCrest, a market neutral systematic equities strategy, dipped 0.5 per cent in December, but posted a 6.4 per cent gain annually.

BMS’s double-digit return represents a strong advance on last year’s 3.2 per cent return.

In March, Bodenholm One, a fundamental long/short equity hedge fund offered on the Brummer Multi-Strategy vehicle, was liquidated after Brummer withdrew capital from Swedish manager Bodenholm Capital.