According to Martin Källström, the change of CEO at Lynx has been in the works for some time.
“The handover has been gradual since I became deputy CEO 1.5 years ago. This means that most people in the organization already know me well as a leader,” he tells our Swedish sister media, FinansWatch.
Founder Svante Bergström will take on the role of executive chairman with a continued active role in portfolio management.
“Svante has spent 25 years as CEO building the company from the ground up and has a strong emotional connection to its success. As Chairman of the Board, he will continue to be an important culture bearer and support for me, even if he no longer participates in management team meetings or makes operational decisions,” says Källström.
According to Källström, Bergström will remain active in the development of the Lynx program.
The strategy includes constantly taking active positions in the world’s futures markets based on signals generated by algorithms. The aim is to find price trends and capture price momentum in both upturns and downturns in a variety of sectors, such as equities, fixed income, currencies and raw commodities. According to Källström, the strategy has evolved over time to become much more than pure trend following.
“The program uses multiple models and applies a range of statistical techniques to identify and capture trends over multiple time windows. In addition to innovative trend-following concepts, the strategy includes an allocation to diversifying models that exploit market phenomena other than price momentum,” he explains, adding:
”These diversifying models consist of systematic global macro concepts based on fundamental and new alternative data, as well as models that utilize various machine learning techniques. In total, the program consists of about 50 different models.”
Forging its own path
According to the hedge fund CEO, a key challenge going forward is to further develop the Lynx program and broaden the product portfolio so that the company can offer a range of investment strategies.
“We are now working on a fifth strategy with a particular focus on stock markets as a new leg of our long-term vision. We are on a journey with a clear vision to offer investors a handful of differentiated, world-class investment programs,” says Källström.
According to Källström, several of Lynx’s competitors have chosen to put fewer resources into their trend-following flagship products and instead offer them at lower fees. In addition, many major banks now offer replicated trend-following strategies at low fees. Lynx has chosen to forge its own path.
“Rather, we want to continue to develop the Lynx program to further improve its risk-adjusted returns and portfolio protection properties. Our longstanding work in machine learning is one such example”, says Källström.
The Lynx program has continued to perform well in recent years, both in absolute terms and relative to relevant benchmarks. In 2022 alone, the strategy recorded a gain of around 37%. This year, according to Lynx’s half-year report, the strategy has lagged the industry index slightly in the first six months but has so far fared well during the market turbulence that prevailed in early August and caused many trend-following strategies to record significant declines.
“Like everyone else, we have seen losses in our long equity positions but have been relatively quick to move into long bond positions, which has saved us from major losses at a portfolio level. It is precisely during turbulent periods that the complementary strategies can really make a difference. If we can ride out short-term volatility, the Lynx program has an unusually good ability to capture long-term price trends, especially those that occur during periods of market crisis,” concludes Martin Källström.
(This article was provided by our Swedish sister media, FinansWatch. Translated using Deepl with additional editing by Katrine Gøthler)
