2014 Nordic Hedge Award – Determining the winners

Unlike many other awards in the financial industry, since its inauguration in 2012, the Nordic Hedge Awards takes pride to determine the winners as best Nordic  hedge funds in the respective categories  in a three step process.

Qualifying Universe

To quality funds and managers need to be listed in the Nordic Hedge Index (NHX). This requires funds and managers to meet certain criteria to fit within the definied universe of Nordic hedge funds and making relevant documents and performance data available. (Prospectus, KIID…). Despite being listed in the NHX, funds need to meet additional criteria to qualify for the Nordic Hedge Award, such as minimum asset under management (25MUSD – soft) and a minimum track record of 18 months. (hard.)

Quantative Ranking – The Shortlist

Funds qualified for the Nordic Hedge Award undergo a quantitative screening and ranking. The model for this procedure was co-developed by HedgeNordic and Stockholm School of Economics takes several key figures of the funds short and long term (risk adjusted) absolute and relative performance into consideration. Certain factors in these calculations may be over or underweighted. (As example, the one year Sharpe Ratio may have a higher or lower weighting than the absolute performance of the fund).

Results of these calculations are translated to a point scoring system. The five highest scoring funds per category make up the short list of funds and are the nominees to be considered for the Nordic Hedge Award by the Jury.

Funds nominated for the 2014 Nordic Hedge Award can be viewed here: Nominations

Qualitative Scoring             

Unlike other industry awards, the Nordic Hedge Award is not a pure performance award. In order to also capture components of a fund and hedge fund manager that are hard to evaluate in a model the organizer introduced a professional Jury to the scoring. This Jury will also take “soft factors” into account and determine the final ranking of funds through the points each jury member awards.

Jury members will be presented with the short list of five funds per category.  The funds scoring or ranking will not be disclosed to jury members to avoid any biases. Each jury member will then assign his / her score to each individual fund on a purely discretionary basis. (“qualitative score”). While jury members are free and uninfluenced to assign their scores at their discretion, HedgeNordic as organizer of the Nordic Hedge Award does suggest to consider factors that have not been captured in the quantative scoring and rather way in soft factors, such as organizational and administrative structure, fees, manager reputation, asset raising capabilities, transparency, good conduct in sales and marketing etc.

Jury members for the 2014 Nordic Hedge Award are:  Magnus Jahnke (Portfolio Manager, Lancelot Asset Management), Wollert Hvide (Managing Director, Sector Asset Management), Julia Axelsson (CAIA), Peter Ragnarsson (Portfolio Manager, External Management, AP3) Jauri Häkkä (Executive Director Alternatives & Manager Selection, Nordea).

Once HedgeNordic has received all scores by the individual jury members the computation starts according to the following procedure: Like in some sports, the highest and the lowest  of the six scores given by individual jury members are disregarded for further calculation. The remaining four scores are then normalized and added to the score each fund received from the initial quantative calculations. The combined scores of the qualitative jury score and the quantative scoring represent the total score for each fund, the ranking of which determines the final result and winners of the Nordic Hedge Award. Qualitative and quantitave scores are equal weighted. The top three ranked funds per category will be distinguished on April 22nd in Stockholm.

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