Plenum Power Surge, a hedge fund managed by Plenum Investments AG in Switzerland, returned 19 per cent in the first two months of the year, according to Bloomberg. What’s amazing is that they did it just by betting on very chilly temperatures.
“To put it simply, we were bullish on the weather,” said Henrik Wennberg, one of Plenum’s portfolio managers.
Specifically, their bet was on an increase in Scandinavian electricity prices.
It was freezing (record lows since 1987 in Sweden), so consumers started sucking up electricity (heat).
Plenum had gone long on the Nordic electricity market in the middle of December. When prices rose as companies had to reduce outflow to prevent blackouts, their initial $92 million investment went up 19%, to $110 million.
Read more on Bloomberg.