Best Multi-Strategy Hedge Fund: Shortlisted

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.

By providing exposure to a range of hedge funds in the Brummer & Partners investment stable, the Brummer Multi-Strategy Fund delivers an investment alternative for investors looking to diversify their risk across individual investment strategies and to generate a competitive risk-adjusted return.

Managed by Patrik Brummer, chairman of Brummer & Partners, and the group's CEO Klaus Jäntti, the fund in 2009 delivered a return of 11.8%, exceeding the target of a long-term annual return of 8%-10%.

The success of the risk diversification strategy was reflected in this performance, the managers say. During the year, the correlation among the funds remained low, ensuring diversification and helping to deliver a good risk-adjusted return.

At the same time as spreading risk, the fund benefited from the very strong performance of two of the single-strategy funds: Nektar, which delivered a 37.6% return and Manticore which returned 27%.

Risk in the fund, as measured by the standard deviation of the fund's return, is expected to be significantly lower than the stock market risk. The fund aims for a competitive uncorrelated risk-adjusted return compared with traditional asset classes, making it attractive as a means of improving diversification in a traditional investment portfolio of equities and bonds.

The managers think a good criterion for assessing the performance of a hedge fund lately is to see whether a fund has generated positive returns both in 2008 and 2009.

The market downturn in 2007-09 has seen the hedge fund industry undergo a consolidation and has left investors cautious and wanting experienced hands in the market and the ability to mitigate risk. This plays well to the Brummer Multi-Strategy Fund, the managers believe, as investors are seeking funds that are well established and have been through both downturns in the equity market over the last decade.

Fund facts: Brummer Multi-Strategy Fund

Full name of fund: Brummer Multi-Strategy
Name of portfolio managers: Patrik Brummer and Klaus Jäntti
Name of investment/management company: Brummer & Partners
Contact information: Norrmalmstorg 14, Stockholm, SE-103 86, Sweden (+46 8 407 13 00; IR@brummer.se)
Launch date: April 1, 2002
Assets under management: $3.2 billion (at April 30, 2010)
Net cumulative performance since inception: 106.68% (at March 3,1 2010)
Annualised return: 9.49% (at March 3,1 2010)
Annualised volatility: 4.48% (at March 3,1 2010)
Sharpe ratio: 1.54%
Strategy: multi-strategy
Share classes: euro; leveraged Bermuda vehicle available in Swedish kroner, US dollars and euros
Administrator: B&P Fund Services
Auditor: KPMG
Custodian: SEB
Domicile: Sweden
Management fee: 0% (charged by underlying funds)
Performance fee: 0% (charged by underlying funds)
Minimum investment: Skr 100,000
Redemption/liquidity terms: monthly with six days' notice