Hedge Funds- A case study on Brummer & Partners Hedge FundHelios 2xL- A Multi Strategy Fund with Leverage

Sammanfattning: The expression “hedge” can be seen as protection and Alfred Winslow Jones was the one whostarted the first hedge fund in 1966. He implemented an investment technique by using hisknowledge in finding over- and undervalued stocks in a market that he believed to always beinefficient. This has evolved to a creation of a variety of strategies employed today by hedgefund managers.The purpose of this study is to analyze how three variables, multi strategy, leverage and offshore registration affect a specific hedge fund’s performance in comparison to the Swedishhedge fund index (HFXS). The paper was conducted as a case study focusing on Brummer &Partners offshore registered multi strategy fund with leverage, Helios 2xL.The fund iscomprised of seven underlying funds that are also Brummer & Partners hedge funds.A pro forma statement from Helios 2xL was used when measuring the funds performance incomparison to the HFXS index, which includes 30 of the larger hedge funds in Sweden.We came to the conclusion that when the three variables multi strategy, leverage and offshoreregistration were analyzed we clearly saw that they gave Helios 2xL a higher return than thecomparison HFXS index. Helios 2xL is currently having an optimal diversification andimplementing a dynamic use of leverage, which has shown to be extremely difficult for aninvestor to conduct on his own. Moreover, being exposed to an offshore environment makesHelios 2xL a competitive fund in the international arena.