Winning bets on the lithium sector have helped Vivid Capital, a small, a relatively new, hedge fund firm, chalk up gains of 39% this year up to the end of November, according to a report by Reuters.

The Toronto-based firm, which focuses primarily on energy-transition investments, manages less than CAD50 million and runs just one fund – the Vivid Energy Fund. The fund's string performance this year comes on the back of short positions in companies that focus on direct lithium extraction, including Vancouver-based Standard Lithium Ltd, which has seen a 61% fall this year following speculation about the effectiveness of its technology.

The report cites president President James Bradford as revealing that Vivid Capital has also benefitted from value positions in lithium companies with projects based on high-quality conventional brine reservoirs, such as Australia’s Lithium Power International Ltd. The fund also holds positions in small hard-rock lithium developers, such as Frontier Lithium Inc and Grid Metals Corp, he said.