Ridge Capital AB

All figures are as of July 31, 2024.

Our RAIF, invested in Nordic High Yield credit corporate listed bonds, gained over 27% net returns since its inception in January 2023, with a volatility below 4%, a Sharpe ratio above 3, a correlation with equities close to zero.
 
It offers access to the holy grail of financial products: high returns, low volatility, and minimal correlation with other asset classes.
 
Out investment edge and our reason to exist, is well summarized in this The Hedge Fund Journal    interview with our lead managers, in their 2024 edition of " Tomorrow's Titans: 50 rising star hedge fund managers ".
 
Our fund is a little jewel exploiting a niche. We will hard close when it reaches its maximum capacity. This should happen around 250-300m€ aum (i.e 500m€ total size with our 1.5x structural leverage ; which is circa 1% of the Nordic HY total market size). Given the pace of our fund raising, we expect it will happen before the fund's three years anniversary (January 2026).
 
Why Nordic High Yield?

• It differs significantly in behavior and in return potential compared to Euro and US HY yield.
• It has for example, quasi zero correlation with equities, quasi no credit duration, and >+2% structural yield pick-up vs Euro or US HY

Why Ridge Capital?

• Outstanding Performance: Our strategy has been one of the top performers in the Nordic High Yield bond market since inception, achieving +12.8% net in 2023 and +12.9% net YTD in 2024.
• Impressive Risk Metrics: Sharpe ratio of 3.2 and annualized volatility of 3.9% since inception (in line with the strategy's structural targets)
• Experienced Management: Christoffer Malmström, our lead portfolio manager, has built the best top track record in this asset class since 2018.
• Generous Risk Premium: Our strategy harvests the generous risk premium in this niche market (we invest between 500-800 basis points above risk free rate, with some outliers)
• Unique Investment Style: The co-founders decided to address the inefficient an illiquid Nordic High Yield bond market with an innovative strategy in the asset class

Strategy highlights:

• High Coupons & Additional Risk Premia for Illiquidity: Leveraged yield to maturity as of end-July 2024 is 17.8%
• Monthly Liquid Luxembourg RAIF: In a market dominated by UCITS with daily liquidity, which distort prices with their too large in/outflows (from mainly retail investors) for the asset class
• Activity in the Secondary Market: An additional source of alpha, neglected by peers who manage with a "Buy-and-hold" style
• Structural 1.5x Leverage: Our lead manager has found this to be the right level during market crises. This counterintuitively allows us to lower credit risk by investing in better-rated high yield bonds, compensate for the lower yield, and reach our return target (base rate + >7% net)
• Portfolio Hedging Against Spread Widening & Currency Risks
• Negligible Interest Rate Risk: Due to the naturally low duration of the Nordic High Yield market, consisting in over 75% floating rate notes