How Swede It Is – And Isn't

Hedge funds are getting the royal treatment in Sweden, literally. According to Dagens Industri, King Carl XVI Gustaf's best-kept secret is out. In 1988, he established an investment company called Gluonen as a "private income tax reduction" for his three kids, and nearly half of its 13.5 million krona (US$1.8 million) in assets are reportedly in two of the country's most prominent hedge funds: Dagens Industri says the king plunked down 2.7 million krona (US$358,000) in Tanglin Investment's Tanglin Hedge Fund and 2.3 million krona (US$305,000) in Peter Edwall Asset Management's Pecunia Fund. But did His Majesty's fund Tanglin run out of gas? According to the Stockholm-based investment firm's Web site, the fund appears to have lived up to its promised goal of 15% to 20% annual return; since its inception, the fund has grown more than 102%. Then along came 2005, and Tanglin inched up a measly 1.4%. Interestingly, the king's investment represents the lion's share of the total 3.379 million krona (US$448,000) in the fund, which obviously is not big enough to cause any worries. No information on Pecunia was available, as the Edwall firm's Web Site, if it does exist, could not be reached.