Shepherd Energy Hedge Fund Halts Oil Trading to Focus on Power

Shepherd Energy AB, a Swedish investment company that manages a hedge fund specialized in energy, plans to stop oil and emissions trading to focus on Nordic power.

Total net asset value rose 1.22 percent in the first 10 months from a year earlier, according to the fund’s latest monthly report. Results from emissions trading and oil weighed down an 8.6 percent gain in electricity trading, Arne Oesterlind, a fund manager at Shepherd Energy, said today by phone from Stockholm.

“Our best performance comes from trading power,” he said. “Excessive price movements have prompted us to withdraw from trading oil, while narrow price ranges and too little volatility for emission permits have caused us to pull out.”

Nordic power funds have seen returns fall amid Europe’s struggle to tame its debt crisis, with Sweden’s Adapto Advisors AB ceasing trading in its two-year-old Adapto Energy Fund in June following investor withdrawals. NK Funds AS in Bergen, Norway, closed its Nordic Power trading fund in August after price volatility led to losses. Shepherd Energy doesn’t disclose data on invested capital.

“We are not as big as we were historically,” Oesterlind said. “The Nordic power market has been challenging and jittery, often with a lack of clear price trends, and with contrarian movements, although the past six months have again been more driven by traditional weather factors.”

The fund, which has sought funds from institutional and wealthy private investors since 2004, aims for annual net returns of 12 to 15 percent, according to its website.

“Nordic power is where our team’s competence is, and we are more likely to achieve our return goals now that we focus on electricity, also including Germany,” Oesterlind said. Fund managers include Mattias Hellberg and Andreas Edlund.

To contact the reporter on this story: Torsten Fagerholm in Helsinki at tfagerholm@bloomberg.net

To contact the editor responsible for this story: Lars Paulsson at lpaulsson@bloomberg.net

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