Change in Brummer Multi-Strategy
Brummer Multi-Strategy (BMS) is redeeming its entire investment in the fund Observatory. The fund was launched in 2004 and is currently hovering around its all-time high. However, BMS’s portfolio managers deem the fund’s expected future contribution to BMS's risk-adjusted return not to be competitive enough going forward.
“All credit to Observatory, its CIO Shazad Ghaffar and his 30+ years in the industry. He has performed well over a long period of time, with a market neutral approach and limited drawdowns. There are very few long/short credit strategies that have succeeded so well in generating alpha over time while maintaining high liquidity. Unfortunately, the annual absolute return over the past three years has been too low and the expected future risk-adjusted return is not deemed to be competitive enough”, comments Mikael Spångberg, BMS portfolio manager and continues:
“The decision is an undramatic one. We have had a constructive dialogue with Shazad Ghaffar about risk-taking, the portfolio and the strategy’s future opportunity set and have then decided to redeem our shares. The purpose of all investment decisions is to improve BMS and its conditions to be able to generate strong, risk-adjusted returns”, Mikael Spångberg says.