Red hot in the frozen North

Hedge funds are sprouting up in the Nordic region, as institutional investors such as Volvo’s pension fund aim to plough up to 10% of their assets into such schemes. But this very growth could destroy some of the business’s impressive returns

The Nordic area is proving an increasingly friendly climate for hedge funds. The region’s institutional investors and private banking clients – who are among the most sophisticated in Europe – are ploughing more assets into them, partly because Nordic hedge funds have posted some of the most impressive risk-weighted returns in the world during the past few years. Clients are also seeking to diversify away from under-performing equity markets into alternative investments.

This heady mix has