AMWatch

Swedish long/short fund closes amid high returns and investor interest

The Stockholm-based hedge fund Gladiator is closing for new investors to protect the initial investors' potential return. The fund manager has been branded a "star manager" in the Swedish media, having generated a 21.24 percent return between January to September.

The fund's name Gladiator origins from the Roman Empire's armed figthers. | Photo: Photo by RODGER BOSCH / AFP)

The Stockholm-based Nordic long/short equity fund Gladiator is closing for new investors on December 1st, 2018.

The fund is being closed because assets under management are rising so fast. If that pace continued, the reasoning is that it could become hard for fund manager Max Mitteregger to make a positive return without potentially harming the return of the initial investors.

"The closing of the fund is a consequence of the fund being so large today with a managed capital of SEK 4.7 billion (EUR 455 million). With the investment mandate I have, it will become harder to generate returns if the fund continues to get bigger. In addition, it is my belief that it is better to look for investments in the area that I master instead of expanding the investment universe to Europe or the US," Mitteregger told Swedish news service Placera.

Since Gladiator's inception in February 2005, he has generated an annualized net return of 13.00 percent by taking long and short positions in Nordic companies with a market capitalization of at least SEK 3 billion.

On top of this, the 2018 return to the end of September is 21.24 percent. By comparison, Hedgenordic's equity index, which tracks 61 Nordic equity focused hedge fund managers, has delivered a mean return of 2.78 percent in the same period. 

Morningstar Sweden's analyst Jonas Lindmark writes that positive articles in the media, alongside strong returns, have increased interest in the fund.

Star manager

Taliking to AMWatch, Lindmark highlights a newly-published article in Swedish financial title Dagens Industri as an example where Max Mitteregger is labeled "The star manager" -- and not for the first time. Dagens Industri has often branded to the Stockholm-based manager as "fondstjärnan" and "stjärnförvaltaren". Both words translate as star manager.

This development has ultimately led to the board deciding to close the fund for further investors. Gladiator may, however, open for subscription after December 1st, 2018 if the board of directors believes that additional capital will not obstruct effective management of the fund's existing capital.

According to data provided by Morningstar Sweden, Gladiator has SEK 534 million in assets under management. There are four other Sweden-domiciled in the Morningstar fund category "alternative - long/short equity" that have more assets under management.

These are Adrigo Hedge, Priornilsson Yield, Aktie-Ansvar Graal and Priornilsson Idea.

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