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Brummer’s multi-strategy hedge fund flagship flat for July as equity managers stumble

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Stockholm-based Brummer & Partners’ flagship multi-strategy hedge fund vehicle remains flat for the year after ending July close to zero, with its equities-focused strategies suffering negative performance last month.

Brummer Multi-Strategy (BMS) fell 0.1 per cent in July in both its SEK and dollar-denominated classes, with the twice-levered BMS 2xL version down 0.3 per cent in both classes.

Overall, the BMS vehicle remains flat year-to-date at 0.2 per cent, with the twice-levered strategy returning 0.0 per cent in the seven month-period since the start of January, having ended the first half of 2021 in broadly similar territory, the Swedish fund manager said in an update this week.

Its long/short equity-based funds were caught out as US stock markets ended higher last month with concerns surrounding the Delta variant easing. Black-and-White lost 1.7 per cent in July, while Manticore was down 1 per cent. Black-and-White has now plummeted almost 14 per cent over the course of 2021, though Manticore remains in positive territory, up 3.2 per cent year-to-date.

Elsewhere, systematic equity strategy AlphaCrest remains up 5.5 per cent for the year, despite sliding 2.2 per cent last month. Long/short credit manager Observatory dipped 0.2 per cent in July, though has gained 1.5 per cent over the seven-month period.

Brummer noted that price volatility in Brent crude loomed large over commodities markets during July, while in currency markets the dollar index finished the month lower. In China markets were weighed down by concerns over Beijing’s regulatory crackdown.

Arete, a discretionary macro fund, rose 2.4 per cent by successfully navigating July’s continuing volatility and making gains with correct equity bets. It has now advanced 6.8 per cent since the start of 2021.

Systematic trend followers Florin Court and Lynx generated gains of 1.3 per cent and 1.4 per cent, respectively. Florin Court – which capitalised on power and commodities moves – has now returned 10.5 per cent this year, while Lynx, whose July gains were fueled by fixed income and equities positioning, is up 1.4 per cent in 2021.

Machine learning strategy Lynx Constellation has tumbled 8.9 per cent this year, with July’s gains muted at 0.7 per cent, while Frost – a fixed income relative value fund – has made 2.8 per cent YTD, having added 0.2 per cent last month.

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