Audio: Brummer & Partners

Winner: Best overall group

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From the start Brummer & Partners has been different. Patrik Brummer founded the company together with some close colleagues who worked together at the Nordic investment bank Alfred Berg, Brummer & Partners. The idea was to introduce alternatives to onshore Swedish investors.

It launched Sweden's first hedge fund in 1996 and since then has become one of the leaders in the Scandinavian hedge funds industry and throughout the Nordic region.

The unique structure pioneered by Brummer allowed individual funds and their managers to keep brand identity but under the umbrella of the group. That umbrella also provided investors and the funds with added infrastructure, operational risk services and other functions that individually the funds would have found hard to match in their early stages.

The product range now consists of a wide range of single strategy hedge funds in both onshore and offshore versions.

Since 2002 Brummer & Partners has also been offering a fund of hedge fund, Brummer Multi-Strategy (previously called Helios), which can invest across the group's hedge funds. A leveraged version is also available, Brummer Multi-Strategy 2xL.

Brummer & Partners has also opened its hedge fund products to a wider range of retail investors through Brummer Life, a fund marketplace where savers can invest online in the Brummer Multi-Strategy Fund and the group's other actively managed funds individually or in combination.

In July 2009 the company launched the Singapore-based Karakoram Fund.

In February 2010 the group added its first London-based manager to its stable through a partnership with credit markets specialist Observatory.

CEO Klaus Jäntti says the company is not easily pigeonholed into any category. It is not a seeder, nor is it a fund of hedge funds.

“We’re not an incubator or a seeding platform. We like to think of ourselves as creating a large and expanding partnership in a very conservative manner. Seeding does enter into it. We identify a team we like and then obviously we will have to get them going. So seeding is part of that.”

If the company were to add to the suite of funds, Jäntti says Brummer looks for specific characteristics. “On a standalone basis the team and individuals must be expected to create competitive, risk adjusted and uncorrelated returns. But unfortunately that’s not good enough. They do actually have to provide diversification to the group so they have to be virtually uncorrelated with what we already have otherwise they wouldn’t be improving our group and our offering to our clients.”

Brummer is the largest hedge fund group in the Nordic region with assets under manager of $14.6 billion at the end of February 2012 and growing. The group now has 140 people in 11 investment teams with 110 people in supporting infrastructure. In addition to Stockholm and Oslo, Brummer has offices in London, Singapore and Dhaka.

Not only does the group run multiple hedge funds, it also established a fund administration company, B&P Fund Services, a unit-linked insurance business (Brummer Life) and an international fund of funds business.

Brummer & Partners' business concept is to offer a well-diversified portfolio of investment products while bringing together skilled fund managers with different investment strategies in a single corporate group. The goal is to generate a competitive risk-adjusted return.

Looking to the industry as a whole, Jäntti says he is concerned about the regulations coming out of the EU and specifically the alternative investment fund managers (AIFM) directive. “Mainly what is most disturbing is this degree of unpredictability and uncertainty. It’s tough enough to try to generate absolute returns in this environment, but to battle against totally unpredictable political views makes running a hedge fund very, very difficult.”

award23The bulk of investors in Brummer & Partners (around 70%) come from the Nordic region. The group has also been supported and encouraged by the regulatory framework in Sweden and Finland. These two countries introduced comprehensive supervisory rules for the hedge fund industry including a high level of transparency and investor protection.

In the future, Brummer is likely to expand by adding more strategies and funds to the group. “There’s no set game plan. We are entirely opportunistic. We’re constantly on the lookout for new teams, new styles and new individuals who can be expected to generate good risk-adjusted returns and also be uncorrelated with what we already have.”

[Pictured: Gunnar Wiljander, Brummer & Partners]

Jäntti continues: “I can only hope that we will continue to perform as we have done during all these years we’ve been in business. If we stick to our methodology and our high degree of internal diversification, we’ll most probably mean that we perform quite adequately.”

Previous awards
2010 winner
Best overall group

Brummer & Partners’ range of funds
Category Fund name Strategy AUM * Launch date
Long/short equity
- Orvent Asian event $126 million January 1, 2011
- Benros European event $345 million June 1, 2011
- Futuris European $1.199 billion October 15, 1999
- Zenit Global $1.431 billion July 1, 1996
- Manticore TMT $823 million January 1, 2001
Market neutral
- Archipel Globa $688 million January 1, 2007
Fixed income relative value and macro, credit
- Observatory Global credit $754 million July 1 2004
- Nektar Fixed income relative value and macro $3.395 billion January 1, 1998
CTA
- Lynx Managed futures $5.134 billion May 1, 2000
* AUM at February 2012

 

 

 

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