Brummer Multi-Strategy monthly commentary February 2026

Markets

February 2026 was marked by heightened volatility across global financial markets, driven primarily by AI-related concerns and an accompanying sector rotation.

The month was dominated by a sharp sell-off in technology stocks, particularly those exposed to AI disruption. After reaching a record high in late January, the Nasdaq fell back and was down nearly 3% for the year by mid-February, while the S&P 500 surrendered almost all of its year-to-date gains. Large-cap technology came under particular pressure. Amazon shares declined more than 9% after announcing plans to spend approximately $200bn on AI infrastructure in 2026, roughly one-third above Wall Street expectations. Software companies were hit especially hard as investors grew concerned that increasingly powerful coding tools, including those released by AI group Anthropic, could disrupt established business models. The move reverberated across markets, with the VIX volatility index rising to its highest level since late November.

Private capital firms also faced significant declines, as investors reassessed growth prospects and potential exposure to software-heavy portfolios.

In contrast, European equities attracted record inflows as investors sought alternatives to richly valued US technology stocks amid the broader rotation out of “asset-light” to “asset-heavy” businesses. 

In fixed income markets, the technology-led sell-off prompted a move into safer assets, with US Treasury prices rallying. The two-year Treasury yield fell to 3.38%, its lowest level in a month. In currency markets, sterling weakened following dovish language from the Bank of England’s Monetary Policy Committee.

In commodities, oil prices extended their gains to a fresh six-month high as tensions between the US and Iran escalated, culminating in US-Israeli military strikes over the weekend. Ongoing Middle East uncertainty also supported safe-haven demand, lifting the price of gold.

Brummer Multi-Strategy

Despite February’s significant factor rotation and sell-off in “AI-at-risk” names, Brummer Multi-Strategy’s long/short equity teams performed very well. Solid alpha was generated across TMT, listed real estate and consumer sectors. Within TMT, in particular, substantial short alpha was generated (much of which in software names). Positioning in the financials and healthcare sectors were minor drags to the portfolio. 

Systematic trend-following was also highly profitable for the month with positioning in equities (mainly Korea and Japan) and commodities (mainly precious metals and Brent crude) generating solid gains. 

Contribution from fixed income and macro teams was broadly flat. Gains in fixed income relative-value positioning in Scandinavia were offset by losses in systematic macro and systematic fixed income strategies.  

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