Hedge Fund Guide 2025 - A Guide to Hedge Funds and Hedge Fund Managers in South Africa

A GUIDE TO HEDGE FUNDS AND HEDGE FUND MANAGERS IN SOUTH AFRICA

2025 HEDGE FUND GUIDE
CONTENTS
Introduction
By Rob Macdonald
4 What is a hedge fund?
Hedge funds employ investment strategies that aim to
outperform in both rising and falling markets.
8 Types of hedge funds offered in South Africa
All hedge funds in South Africa are classified according to
four tiers.
12 The pros and cons of using a hedge fund
Hedge fund strategies are not guaranteed to outperform more
traditional investments, but they can turn market downturns
into value generating opportunities.
14 Considerations for retail and institutional
investors when incorporating hedge funds into
their investment portfolios
A careful consideration of how hedge funds fit into an overall
investment strategy is crucial for both institutional and retail
investors, as is close attention to regulatory requirements.
18 Choosing the right hedge fund
Investment strategy, track record, risk management, investment
team, fees and a thorough due diligence are key considerations
when choosing a hedge fund.
Profiled companies
1 Peregrine Capital
20 Absa Prime Brokers
22 Amplify Investment Partners
24 Bateleur Capital
26 Blue Quadrant Capital Management
28 Corion Capital
30 Edify Fund Managers
32 Laurium Capital
34 Matrix Fund Managers
37 MitonOptimal
38 Mazi Asset Management
40 Novare Investments
42 Protea Capital Management
44 Rozendal Partners
46 Differential Capital
47 Senqu Capital
48 SouthernCross Capital
50 Terebinth Capital
52 Visio Fund Management
53 AIP Capital Management
Reference
54 Listing of hedge fund managers
A GUIDE TO HEDGE FUNDS AND HEDGE FUND MANAGERS IN SOUTH AFRICA
Members of the Financial Planning Institute of
Southern Africa (FPI) can earn one verifiable
Continuous Professional Development (CPD)
point by completing an online assessment on the
FPI member portal, based on the introductory
content in the Blue Chip
Hedge Fund Guide
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2025 HEDGE FUND GUIDE – PUBLISHER’S MESSAGE
Blue Chip
Hedge Fund Guide
www.bluechipdigital.co.za
Publisher: Chris Whales, chris@gan.co.za
Introductory features: Rob Macdonald,
rob@coachingwayofbeing.com
Editor: Ralph Staniforth
Account managers:
Gavin van der Merwe
Sam Oliver
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Website: www.gan.co.za
Hedge funds have long been shrouded in myths and
misconceptions, but today, the South African hedge fund
industry is governed by robust regulations under the supervision
of the Financial Sector Conduct Authority (FSCA), meeting
stringent transparency, governance and risk management requirements.
Investors have access to a variety of retail-friendly hedge funds that
are becoming essential building blocks in investment portfolios, as
investors seek more protection, consistency and diversification.
The 2025 Blue Chip Hedge Fund Guide is the launch edition of a
special annual supplement designed to provide useful information to
the South African financial planning community on these investment
vehicles. Rob Macdonald, an independent consultant, author and CFP®
Professional, provides a series of introductory articles on hedge funds:
what hedge funds are; the history of hedge funds; the various types
of hedge funds offered in South Africa; the pros and cons of using a
hedge fund; why financial planners and institutional investors should
consider incorporating hedge funds into an investment plan; and
how to choose the right hedge fund. Members of the Financial Planning
Institute of Southern Africa (FPI) can earn one verifiable Continuous
Professional Development (CPD) point by completing an online
assessment on the FPI member portal, based on the introductory
articles in the Hedge Fund Guide.
The Hedge Fund Guide also features contributions from a number
of South African hedge fund managers in the form of company
profiles and interviews with key individuals involved in the management
of the hedge funds, exploring a range of topics such as investment
philosophy, competitive advantages, costs and performance. This is
followed by a listing of 33 South African hedge fund managers and
the hedge funds they offer.
The Blue Chip Hedge Fund Guide follows the successful format of
the annual Blue Chip DFM Guide launched in February 2025, with
the Structured Products Guide set to be launched in January 2026
and the second edition of the DFM Guide due for publication in
February 2026. The guides are produced by Global Africa Network
Media, the publisher of Blue Chip Journal. Blue Chip is the official
publication of the FPI, published quarterly in January, April, July and
October, and distributed directly to the full and up-to-date member
base of the FPI, reaching over 5 000 CFP® Professionals as well as
other categories of FPI membership.
Digital editions of Blue Chip Journal, the Blue Chip Hedge Fund Guide
and the Blue Chip DFM Guide can be found at www.bluechipdigital.co.za
3

2025 HEDGE FUND GUIDE - INTRODUCTION
What is a
hedge fund?
Hedge funds employ
investment strategies that
aim to outperform in both
rising and falling markets.
Hedge funds are pooled investment funds employing
more aggressive and complex strategies than traditional
long-only investment funds. The aim of a hedge fund
is to provide investors with above-average returns by
actively managing portfolios and implementing strategies that
can profit from both rising and falling markets.
A brief history of hedge funds
Alfred Winslow Jones, a former journalist and sociologist,
created the first hedge fund structure in 1949 and coined the
term “hedged fund”. At the time the term “hedged” was used on
Wall Street to describe managing investment risk when there
were changes in investment markets. Jones wanted to create
a portfolio that could deliver returns regardless of the overall
market direction. To do this he used two innovative techniques,
firstly by taking long and short positions in shares, and secondly,
by using leverage (borrowing money) to buy more shares.
In taking long positions, Jones would buy shares he expected
to rise, and simultaneously sell shares he expected to fall (short
positions). This “hedged” against market fluctuations, focusing on
individual stock picking rather than overall market movements.
He bought as many shares as he sold, so market-wide moves up
or down would be neutralised in the portfolio. The value of the
portfolio, then, would not be based on the direction of the market
but whether he had picked the right shares to buy and sell. The
use of leverage meant that he could amplify potential returns, but
also potentially losses as well.
Jones was also innovative in how he structured the fund and
took fees. He avoided having to abide by the requirements of
the US Investment Company Act of 1940 by limiting the fund to
99 investors in a limited partnership. Jones’s first investors were
reportedly just friends and associates. Initially his fee was 20% of
profits which meant there was no fee if he did not make a profit.
But this changed when he adopted a 2% management fee on all
assets, irrespective of performance.
The elements that Jones introduced in 1949 established the
core features of hedge funds: a partnership structure where a
percentage of profits is paid as compensation to the general
partner/fund manager; a small number of limited partners as
investors; a variety of long and short positions; and a fee system
of a 2% management fee and a 20% fee on gains often referred
to as the “2-and-20” model.
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2025 HEDGE FUND GUIDE - INTRODUCTION
Jones and his structure were not widely known until 1966
when Fortune magazine published an article by Carol Loomis
titled “The Jones Nobody Keeps Up With”. The article’s opening
line summarises the results at A.W. Jones & Co.: “There are reasons
to believe that the best professional money manager of investors’
money these days is a quiet-spoken seldom photographed man
named Alfred Winslow Jones.”
According to the article, his hedge fund had outperformed
the best mutual fund over the previous five years by 44%, despite
its management-incentive fee. On a 10-year basis, Mr Jones’s
hedge fund had beaten the top-performing mutual fund, the
Dreyfus Fund, by 87%. Initially, hedge funds remained relatively
obscure but interest surged in the 1960s after Loomis’s Fortune
magazine article highlighted Jones’s significant outperformance
compared to traditional mutual funds. This led to the creation
of many new hedge funds.
The core proposition of a hedge fund is perhaps captured in
Alfred Jones’s long-term track record. Not only had Jones been
able to outperform the top mutual funds, but on the downside,
investors lost money in only three of his 34 years of managing
the fund. In contrast, the S&P 500 had nine down years during
that period. Jones had clearly demonstrated that through
hedging, a hedge fund can protect investors when markets
fall, and through leverage, the hedge fund can magnify returns
when markets rise.
In a way the hedge fund industry has mimicked the market
since Jones demonstrated the power of this approach to
investing. Growth in the industry has not been a smooth ride.
In the 1970s there was a downturn due to recessions and
market crashes, followed by an upturn in the 1980s as funds
grew, markets evolved and more sophisticated strategies
were used. The 1990s was a period of significant growth in
the number and variety of hedge funds, with more complex
strategies being introduced and institutional investors showing
greater interest in the sector.
But the 1990s demonstrated that having sophisticated
investment strategies was no guarantee of success. Long-Term
Capital Management (LTCM) was a hedge fund founded in
1994 by John Meriwether and Nobel Prize winners Myron
Scholes and Robert Merton, who were awarded the 1997 Nobel
Prize in Economic Sciences for a new method to determine
the value of derivatives. This method is known as the Black-
Merton-Scholes option pricing formula. The model which they
co-developed with Fischer Black is a mathematical equation used
to calculate the fair price of financial instruments, particularly
options. While Fischer Black was also instrumental in developing
the model, he passed away in 1995, making him ineligible for
the Nobel Prize. LTCM employed complex mathematical models
and high leverage. Despite the pedigree of its founders, LTCM
collapsed spectacularly in 1998 due to the Russian financial crisis,
and it needed a Federal Reserve-led bailout to prevent wider
systemic risk.
Not long after the LTCM collapse, the Tiger Fund, founded
by legendary investor Julian Robertson, closed down in 2000
because of significant losses it made due to poor investment
decisions in the late 1990s during the dot-com bubble.
During the 2008 Global Financial Crisis, which caused
significant disruption in investment markets generally, many
hedge funds were forced to restrict withdrawals and experienced
significant declines in assets. In fact in the first three quarters of
2008, according to Hedge Fund Research, a Chicago-based data
firm, nearly 700 funds, or 7% of the industry shut down.
But despite some high-profile failures of hedge funds, there
have also been high-profile successes. George Soros, who founded
Soros Fund Management, demonstrated how a hedge fund
manager can profit from betting on asset prices falling when he
famously “broke the Bank of England” in 1992 by betting against
the British pound. He reportedly earned over $1-billion in the
process. The Soros fund has a long history of successful global
macro investing.
The success of other high-profile hedge fund managers
demonstrates that hedge funds offer very effective ways to
outperform the market and traditional long-only investors.
The one challenge with assessing the performance of hedge
funds is the difficulty in accessing performance data if you are
not an investor. But an indication of how successful hedge
funds can be is provided by Gregory Zuckerman in his book
about Jim Simons entitled The Man Who Solved the Market.
Simons was a maths professor who founded the quantitativebased
investment business Renaissance Technologies. On the
back of much in-depth research, Zuckerman asserts that from
1988 to 2019 (when he wrote the book), Renaissance’s flagship
Medallion Hedge Fund achieved an annual return before fees
of 66% pa, and an annual return net of fees of 39.1%. His
analysis suggests that Simons out-performed all the big-name
investors of his generation.
The returns comparison (see table below) is not comparing like
with like. Peter Lynch and Warren Buffett’s investment vehicles
Investor Key Fund/Vehicle Period Annualised Returns
Jim Simons Medallion Fund 1988-2018 39.1%
George Soros Quantum Fund 1969-2000 32%
Steven Cohen SAC 1992-2003 30%
Peter Lynch Magellan Fund 1977-1990 29%
Warren Buffett Berkshire Hathaway 1965-2018 20.5%
Ray Dalio Pure Alpha 1991-2018 12%
Source: Gregory Zuckerman, 2019 “The Man Who Solved the Market”.
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2025 HEDGE FUND GUIDE - INTRODUCTION
were not hedge funds, but what it illustrates is the extent to
which even after high fees, hedge fund returns have the potential
to dwarf the returns of arguably the world’s greatest investor,
Warren Buffett.
But it was Warren Buffett who showed that no investment is a
sure bet, not even a hedge fund.
In 2007, Warren Buffett took a million-dollar bet with Ted
Seides of Protégé Partners that an investment in the S&P 500
Index would outperform Seides’s selection of a portfolio of hedge
funds over a 10-year period, net of all fees, costs and expenses.
Protégé Partners, as a fund of hedge funds manager, is in the
business of selecting hedge funds. The time-frame for the bet
was 1 January 2008 to 31 December 2017. Despite this period
coinciding with the Global Financial Crisis and the S&P 500 Index
returning -38.49% in the first year of the bet, Buffett won the bet
convincingly. Buffett invested in a Vanguard S&P 500 Index Fund
which achieved a total return of 125.8% for the period, with an
average annual return of 7.1%. Seides invested in a portfolio of
five hedge funds (the fund names were never disclosed), which
provided a total return of 36% with an average annual gain of
2.2% after fees. In reality Seides’s portfolio was exposed to about
100 underlying hedge funds.
The bet started out as a wager for a million dollars to be
given to the winner’s charity of choice. Both parties initially put
$320 000 each into a zero-coupon bond, which would grow to
$1-million at maturity. But in 2012, Buffett and Seides agreed to
sell the bond and invest the money in Berkshire Hathaway shares
which grew to $2.27-million by the time the bet ended. Buffett’s
charity of choice was Girls Inc of Omaha, which runs educational,
recreational and mentorship programmes for local youth.
What are the lessons to be learned from this bet? Buffett
highlighted that the significant fees charged by hedge funds
was a major contributing factor to the underperformance of
the portfolio of hedge funds. This may be the case. It could also
be that investing in 100 hedge funds is likely to mean that the
quality of the hedge funds will range quite significantly. In fact
over the past 20 years there has been a rise of so-called “pod
shops” where instead of investing in different hedge funds, hedge
funds employ specialist teams in their businesses who pursue
different strategies under one umbrella. Citadel and Millennium
are two of the biggest and best-known hedge funds that employ
this approach.
There are hedge funds that
have been incredibly successful
and that have shown what
a powerful investment
approach it can be
The Global Financial Crisis of 2008 also impacted hedge funds
significantly, with many having to limit withdrawals to prevent
the complete failure of the funds. Buffett has always advised that
investors who don’t know anything about investing should put
their money into index funds as they are simple and low-cost
solutions. Much research shows that active managers (whether
hedge fund managers or not) struggle to consistently outperform
market indices. But as we have seen, there are hedge funds that
have been incredibly successful and that have shown what a
powerful investment approach it can be, when you are looking
to make money whatever is happening in the markets. This is
unlike traditional long-only fund managers who essentially are
betting on asset prices rising in the future, which in a sense is a
one-way bet.
Hedge funds in South Africa
The first South African single-manager hedge fund was established
in 1998, and five years later, in 2003, the first fund of hedge
funds was set up. Regulation of hedge fund managers began in
2007 when the FSCA required that hedge fund managers hold a
Category IIA licence.
In 2011, Regulation 28 of the Pensions Fund Act was amended
to enable retirement funds to invest up to 10% of their assets in
hedge funds. Previously the regulation had not mentioned hedge
funds. This regulatory change was followed in 2014 by the FSCA
and National Treasury beginning a process of expanding the
scope of regulation and oversight of hedge funds. This resulted in
South Africa becoming the first country in the world to implement
comprehensive regulation for hedge fund products in 2015. From
this point, South African hedge funds have been regulated under
the existing Collective Investment Schemes Control Act (CISCA),
No. 45 of 2002.
SA Long Short Equity Hedge
Funds were most popular
with retail and qualified
investors in 2024
Based on regulatory requirements, only certain structures
are allowed within the CIS environment, and a portfolio may
only use the following structures for the investment of its hedge
fund assets:
• A CIS trust arrangement as stipulated by the Collective
Investment Schemes Control Act or
• An en commandite partnership (ECP), also known as an LLP or
limited liability partnership.
In an ECP, the liability of the en commandite partner (whose
name remains undisclosed) towards co-partners is limited to
the specified capital amount contributed or committed by the
en commandite partner. As a result, the en commandite partner
is not at risk of suffering a loss or liability that is greater than
their investment or commitment. While most hedge funds have
previously utilised ECPs, regulations stipulate that any new
structures must be vetted and approved by the FSCA.
According to the Novare 2023 Hedge Fund Survey, the legal
structure of hedge funds in South Africa is overwhelmingly
dominated by Collective Investment Schemes (CIS), accounting
for 99.4% of total assets, which indicates that the majority of
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2025 HEDGE FUND GUIDE - INTRODUCTION
hedge funds in the country are structured within regulated
investment vehicles. In contrast, limited liability partnerships
(LLPs) comprise only 0.5% of assets while other legal structures
make up a negligible 0.1% of assets.
Hedge fund strategies
Hedge funds are pooled investment funds that are able
to employ more aggressive and complex strategies than
traditional long-only investment funds. Rather than simply
buying a share and holding it, in the hope that it will go up
in value, or buying a bond and holding it to maturity, hedge
funds aim to generate higher returns by using a variety of
strategies. These include:
• Short selling: Profiting from a decline in a security's price.
• Long-short equity: Aiming to generate positive returns by
taking both long and short positions in the equity market,
thereby reducing market risk while retaining companyspecific
risk.
• Market-neutral: Taking similarly sized long and short
positions within related equity sectors to offset directional
market risk.
• Leverage: Amplifying investment exposure through
borrowing.
• Derivatives: Using financial instruments like options and
futures.
• Arbitrage: Exploiting price differences in different markets.
• Event-driven strategies: Capitalising on events like
mergers and acquisitions.
• Global macro strategies: Making bets based on
macroeconomic trends.
The South African hedge fund industry had a record year in 2024
with double-digit net inflows for the first time and reaching its
highest-ever level of assets under management.
According to the annual hedge fund statistics released by the
Association for Savings and Investment South Africa (ASISA), assets
under management grew by 34% to R185.12-billion (excluding
fund of funds) over the 12 months to the end of December 2024.
These assets were invested in 221 hedge funds managed by 12
management companies with hedge fund schemes. With assets
of R185-billion, the hedge fund industry makes up just less than
5% of total CIS assets. As at 31 December 2024, there were 103
retail hedge funds in South Africa.
Net inflows in 2024 doubled those from 2023, growing from
R6.24-billion to R13.31-billion. The bulk of these flows were from
retail investors, and Hayden Reinders, convenor of the ASISA
Hedge Funds Standing Committee, says, “This is a strong vote of
confidence from retail investors who recognise the important role
of regulated hedge funds in mitigating market volatility within
an investment portfolio. Our industry is celebrating 10 years of
being a regulated investment product in 2025, and it is good to
see retail investors increasingly trusting hedge funds as valuable
building blocks alongside unit trust funds for a well-diversified
investment portfolio.”
Reinders explains that solid investment performance from
hedge funds, combined with retail-focused investment manager
driven marketing campaigns aimed at demystifying hedge funds
and ease of access, have made retail hedge funds an attractive
investment choice. South African Retail Hedge Funds attracted
net inflows of R11.84-billion in 2024. South African Qualified
Investor Hedge Funds, on the other hand, recorded net outflows
of R70-million.
The flows into the hedge funds in 2024 varied according
to the strategies of the funds. SA Long/Short Equity Hedge
Funds were most popular with retail and qualified investors in
2024. SA Retail Long/Short Equity Hedge Funds attracted net
inflows of R6.16-billion, while their SA Qualified counterparts
attracted R479.01-million. Long/Short Equity Hedge Funds are
portfolios that predominantly generate their returns by pairing
long positions on equities with short selling to benefit from
both rises and drops in market prices.
SA Multi-Strategy Hedge Funds came in second, attracting
retail net inflows of R3.96-billion and qualified money of
R7.21-million. Multi-Strategy Hedge Funds are portfolios that
do not rely on a single asset class to generate investment
opportunities but instead blend various strategies and asset
classes with no single asset class dominating over time.
SA Retail Fixed Income Hedge Funds attracted net inflows
of R1.72-billion. These portfolios invest in instruments and
derivatives sensitive to movements in the interest rate market.
Flows into the SA Retail Other Hedge Fund category were flat.
These portfolios apply strategies that do not fit into the other
classification groupings.
In the qualified investor space, SA Fixed Income Hedge Funds
reported net outflows of R535.15-million and SA Other net
outflows of R21.92-million.
Reinders hopes the positive trend for retail hedge
funds continues in 2025. He also notes that flows into SA
Qualified Investor Hedge Funds will likely remain muted until
National Treasury finalises its review of the tax treatment of
Collective Investment Schemes, including hedge funds.
“The review will also provide much-needed tax clarity for our
industry, hopefully enabling the Financial Sector Conduct
Authority to dust off its review of Board Notice 90. In its
current form, BN90 prevents long-only unit trust portfolios from
investing in hedge funds even though they are also regulated
as Collective Investment Schemes.”
In the US and other jurisdictions, unlike mutual funds,
hedge funds typically face less regulatory oversight and are
generally only accessible to accredited or sophisticated investors
who meet specific income or net worth requirements. They
also tend to charge higher fees.
Hedge funds were initially designed as private investment
vehicles for wealthy individuals and institutions seeking
higher returns and sophisticated investment strategies not
available through traditional funds. The exclusivity and higher
risk-reward profile catered to those with a greater understanding
of complex financial instruments and a higher capacity for
potential losses. Hedge funds have also tended to have liquidity
restrictions which means that investors aren’t necessarily able
to access their funds as easily as they can when invested in a
traditional long-only fund.
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2025 HEDGE FUND GUIDE - INTRODUCTION
Types of hedge funds
offered in South Africa
All hedge funds in South Africa are classified according to four tiers.
The ASISA Hedge Fund Classification Standard classifies
hedge funds in four tiers. Each tier addresses one
of four key questions that any hedge fund investor should
consider when deciding to invest:
1. What type of investor is the hedge fund for?
2. Where geographically does the hedge fund invest?
3. What are the different investment strategies that a hedge
fund can use?
4. What are the different equity strategies that a hedge fund
can use?
FIRST TIER OF CLASSIFICATION
The first tier of classification is based on the type of investor.
Under CISCA there are two types of regulated hedge funds
that are classified according to type of investor:
Retail Investor Hedge Funds (RIHFs) which are aimed primarily at
clients who are familiar with investing in long-only traditional unit
trusts and are subject to stricter regulatory oversight.
Qualified Investor Hedge Funds (QIHFs) are for “qualified
investors” and operated under more flexible regulations
than RIHFs. According to FSCA Notice 42 of 2015, a “qualified
8

2025 HEDGE FUND GUIDE - INTRODUCTION
investor” is a person who invests a minimum of R1-million per
hedge fund and who either:
• Has demonstrable knowledge and experience in financial and
business matters which would enable the investor to assess the
merits and risks of a hedge fund investment, or
• Has appointed an FSP who has demonstrable knowledge and
experience to advise the investor regarding the merits and risks
of a hedge fund investment.
RIHFs are designed for broader market participation and
have stricter investment and risk limitations than QIHFs.
The key investment and risk limitations on RIHFs include
the following:
Leverage limits
RIHFs have prescribed limits on the amount of leverage they
can employ. The gross exposure (sum of all long and short
positions) for RIHFs is capped at a maximum gross exposure
of 200% of the portfolio’s capital. This means that for every
R100 of capital, the fund can have R200 in total long and
short positions. This is a significant distinction from QIHFs, where
managers have more freedom to set their own maximum leverage
levels, which must be disclosed to the regulator and investors.
Position concentration limits
RIHFs have limits on the maximum percentage of the fund’s
capital that can be invested in a single equity position, with no
net individual equity position exceeding 10% of capital. This
helps prevent over-concentration in a single stock and reduces
idiosyncratic risk.
Net exposure limits
The gross exposure limit for an RIHF manager of 200% of the
fund’s Net Asset Value (NAV) effectively acts as a limit on the net
exposure of a fund. The gross exposure is the sum of the absolute
value of all long and short positions. For example, if a fund is
150% long and 50% short, its gross exposure is 200%. While this
isn’t a direct “net exposure limit”, it effectively caps the amount of
leverage an RIHF can take, which in turn limits the potential for
extreme net exposures.
Minimum number of positions
To ensure diversification, RIHFs often have a minimum
requirement for the number of equity positions they must
hold. For example, the FSCA’s requirement of a no more than 10%
in a single equity position means that a portfolio is required to
hold a minimum of 10 equity positions.
Permitted assets and derivatives
• While RIHFs can use derivatives and engage in physical
short selling there are restrictions. Naked short selling (selling
a security without being in possession of it or ensuring it can
be borrowed) is generally not permitted.
• The use of derivatives is generally for hedging or efficient
portfolio management, rather than outright speculative
investment that could lead to losses exceeding the portfolio’s
Net Asset Value (NAV).
• The types of assets RIHFs can invest in are outlined in Board
Notice 90 of 2014 (and its subsequent updates), which
determines permitted securities and assets for CIS in securities
and retail hedge funds.
Liquidity and repurchases
RIHFs are required to offer daily pricing and daily repurchases.
This is a critical risk management feature, ensuring that investors
can access their money regularly and that the fund’s liquidity
profile matches its redemption terms. This contrasts with
QIHFs, which can have less frequent repurchase policies
(eg monthly or quarterly).
Risk management frameworks
RIHFs, like all regulated CISs, must have robust risk management
functions in place, separate from their investment management
and fund administration functions. This includes regular reporting
to the FSCA on risk-related matters. A binding valuation policy and
independent review of valuations are also mandatory.
Disclosure and reporting
RIHFs are subject to wide-ranging disclosure and reporting
requirements to investors, including annual independent external
audits and annual reports, providing transparency on their
holdings, performance and risk management.
The FSCA’s aim with RIHFs is to strike a balance between allowing
the benefits of hedge fund strategies and protecting the general
public with explicit limits on leverage and concentration, strict
liquidity requirements and comprehensive oversight.
Investors
KEY DIFFERENCES BETWEEN RIHFS AND QIHFS
Retail investor
hedge funds
Available to general
public (varying
minimums)
Source: Novare Hedge Fund Survey 2023
Qualified investor
hedge funds
Only available to
qualified investors
(>R1 000 000)
Gross exposure limit <200% Not defined
VAR limit <20% Not defined
Disclosure to clients Monthly Quarterly
Max equity holdings <10% per security Not defined
Investor Liquidity Daily and monthly 90 days
Risk Management Daily Daily
Marketing
Able to solicit
investments from all
investors
Only solicit and
accept investments
from restricted pool
of qualified investors
SECOND TIER OF CLASSIFICATION
The second tier of classification is according to where the fund
invests geographically.
South African portfolios – invest at least 60% of their
total exposure in South African investment markets. These
collective investment portfolios may invest a maximum of
30% of their assets outside of South Africa plus an additional 10%
of their assets in Africa excluding South Africa.
Worldwide portfolios – invest in both South African and
foreign markets. There are no limits set for either domestic or
foreign assets.
Global portfolios – invest at least 80% of their total exposure
9

2025 HEDGE FUND GUIDE - INTRODUCTION
outside South Africa, with no restriction to assets of a specific
geographical country (for example the USA) or geographical
region (for example Africa).
Regional portfolios – invest at least 80% of the total exposure in
assets in a specific country (for example the USA) or geographical
region (for example Africa) outside South Africa.
Note: For the purposes of this second tier of classification, inwardlisted
equities are deemed to be South African assets.
THIRD TIER OF CLASSIFICATION
This tier of classification is based on the manager’s self-classification
according to the objectives of the investment strategy.
Where a CIS RIHF portfolio or CIS QIHF portfolio has a prior track
record and has been classified in a published survey, the category
in which they have been published will be considered and any
deviation from this will need to be justified by the manager.
Long-short equity hedge funds
These funds predominantly generate their returns from positions
in the equity market, regardless of the specific strategy employed.
There are probably two key strategies they employ.
First, is a long-short equity strategy, which aims to generate
positive returns by taking both long and short positions in the
equity market, thereby reducing market risk while retaining
company-specific risk. The goal of a long-short equity strategy is
to minimise overall market exposure, while profiting from gains
in the long positions and price declines in the short positions.
Most local equity long-short funds tend to be long biased.
Secondly, the market neutral strategy fund takes similarly
sized long and short positions within related equity sectors to
offset directional market risk. The goal is to generate profit from
both rising and falling prices. This strategy is often achieved by
holding matching long and short positions in different stocks,
allowing the fund to capitalise on mispricing.
Fixed-income hedge funds
These funds use interest rate sensitivities to generate investment
returns by capitalising on arbitrage opportunities in interest
rate securities. This strategy uses various techniques such as
basis trading (eg cash vs futures), yield-curve arbitrage, credit
spread trading and volatility arbitrage in fixed-income markets.
The goal is to generate returns while hedging against significant
interest rate risk, typically through matched long and short
positions in related securities.
Multi-strategy hedge funds
These funds do not rely on a single asset class to generate
investment opportunities but rather blend a variety of
different strategies and asset classes with no single asset class
dominating over time. By combining approaches such as equity
long-short, credit arbitrage, macro and statistical arbitrage,
the funds aim to achieve diversified, risk-adjusted returns. This
flexible approach allows the manager to adapt to different
market conditions and capitalise on opportunities across
various strategies.
Other hedge funds
These are portfolios that have a very specific strategy that does
not fit into any of the other classification groupings. Some of the
strategies that may fall into this category include:
• Statistical arbitrage – uses quantitative models and
statistical techniques to identify market inefficiencies and
establish short-term positions across a broad universe of
securities. By analysing historical data, price patterns and
correlations, statistical arbitrage seeks to profit from price
movements that deviate from historical relationships or
expected trends.
• Volatility arbitrage – aims to capitalise on discrepancies between
the implied volatility of an option (or other derivative) and
the expected, or realised, volatility of the underlying asset.
The strategy often takes positions in options or derivatives
where the trader believes the market has mispriced future
volatility, seeking to profit from volatility-driven price
differences, regardless of the directional movement of the
underlying assets.
• Commodities – funds that predominantly invest in soft or
hard commodities. These funds can follow several different
strategies to obtain returns that beat their benchmarks
from this asset class, including trend-following or nondirectional
market-neutral strategies.
The graphic below indicates the percentage of industry
assets in each of the Tier 3 strategies as self-reported by hedge
fund managers.
Percentage of hedge fund assets in Tier 3 strategies
Other 14.3%
Multi-Strategy
11.0%
Fixed
Income
16.3%
Source: Novare Hedge Fund Survey 2023
Long/Short
58.3%
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2025 HEDGE FUND GUIDE - INTRODUCTION
As can be seen, total long-short strategies dominate,
with a combined share of 58.3%, showing that the longshort
equity strategy is by far the most common strategy
employed by hedge fund managers in South Africa. Fixedincome
funds represented 16.3% of total industry assets
and multi-strategy funds accounted for 11.0% of assets. “Other”
strategies represented 14.3% of assets, indicating that a
material portion of the industry is allocated to less
conventional or niche strategies that do not fall under the
traditional classifications.
FOURTH TIER OF CLASSIFICATION
The fourth tier of classification applies to those funds classified as
long-short equity hedge funds only:
Long bias equity hedge funds: These portfolios are those
that over time will have had or aim to have a net equity
exposure in excess of 25%.
Market neutral hedge funds: These are portfolios that
have had over time or expect to have over time very little
directional exposure to the equity market. On average,
over time, net equity exposure should be less than 25% but
greater than -25%.
Other equity hedge funds: This category is for portfolios
that follow a very specific strategy within the equity market
such as listed property or sector-specific strategies.
The graphic below indicates the breakdown of the 58.3% of
industry assets in long-short equity strategies (see graphic on page
10) as self-reported by hedge fund managers.
How funds are managed
Hedge funds can be differentiated not only based on their
ASISA classification and the strategy (or strategies) that
they follow, but also on how the fund is managed. There
are broadly three ways in which a hedge fund in South
Africa can be managed:
Single manager funds
These are funds managed by a single investment
manager or team and they would usually follow a specific
investment strategy.
Multi-managed funds
Percentage of assets in Tier 4 strategies
(Long-Short Equity Hedge Funds only)
Equity Long/Short –
Long Bias 45.6%
Source: Novare Hedge Fund Survey 2023
Equity
Long/Short
– Variable
Bias 1.8%
Equity Long/Short
– Short Bias 0.3%
Equity Market Neutral – 10.7%
As can be seen, the Equity Long/Short – Long Bias holds
the largest share of Tier 4 assets, accounting for 45.6%. Equity
Long/Short – Variable Bias contributes a small share of
1.8% and Equity Long/Short – Short Bias is negligible at
0.3%, which reflects minimal use of a predominantly short
strategy among managers. Equity Market Neutral managers
accounted for 10.7% of the industry’s assets invested in
equity long-short strategies.
Multi-managed funds are structured with multiple
managers under one fund. The benefit of this is that
different strategies can be blended in one fund, enhancing
the diversification of the fund. It also means that the
investment management business where the fund is
housed can exercise greater oversight and control over
the different strategies if the managers are all in-house.
Fund of Hedge Funds (FoHFs)
Fund of Hedge Funds invest in a portfolio of different hedge
funds, providing the opportunity for different strategies
to be blended and diversification benefits to be achieved.
The challenge with the Funds of Hedge Funds is that if
the funds are managed by independent managers from
different hedge fund businesses, the ability to exercise
oversight and control over the managers may be limited.
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2025 HEDGE FUND GUIDE - INTRODUCTION
The pros and cons of using a
hedge fund
Hedge fund strategies are not guaranteed to outperform more
traditional investments, but they can turn market downturns into
value-generating opportunities.
ADVANTAGES OF USING HEDGE FUNDS
1. Absolute returns potential (regardless of market direction)
The mantra of traditional long-only fund managers is perhaps
best encapsulated by the statement that “time in the market”
is more important than “timing the market”. The investment
thesis of this approach is built on the foundation of
compounding returns. Albert Einstein referred to compound
interest as the eighth wonder of the world. Who are we to
question the view of such a genius? Yet investment markets
don’t always go up in a consistent straight line and often
experience deep dips in value. These dips may be seen as buying
opportunities by long-only managers but if one doesn’t have
the cash to take advantage of such dips, it’s a futile pursuit.
Buying such dips provides the advantage of rand-cost
averaging one’s entry into an investment, in so doing providing
the opportunity for achieving a greater return in the long term.
In contrast, one of the pros of using a hedge fund is that
the fall in the price of a security or a market isn’t necessarily
seen as a value-detracting event, but potentially a valuegenerating
opportunity. The hedge fund has the potential to take
advantage of the power of compounding in a more profound
way than a long-only fund, as it can limit any losses on the
downside and even potentially generate gains. As Warren
Buffett is alleged to have said, the first rule in investing is not to
lose money and the second rule is to take note of the first rule.
Hedge funds can generate positive returns in both rising
and falling equity markets. They achieve this through various
techniques including:
• Short selling: Profiting from a decline in asset prices.
• Derivatives: Using options, futures and other financial
instruments to hedge against risk or magnify returns.
• Arbitrage: Exploiting small price discrepancies between
related assets.
This ability to generate “absolute returns” (positive returns
regardless of market direction) is a core appeal of hedge funds.
2. Diversification and low correlation
The strategies that hedge funds employ are usually uncorrelated
with traditional asset classes like equities and bonds. This
means that their performance doesn’t necessarily move in sync
with the JSE All Share Index or the bond market. This low
correlation is a significant benefit for portfolio diversification, as
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2025 HEDGE FUND GUIDE - INTRODUCTION
it can help to reduce overall portfolio volatility and lead to
smoother returns over time. When traditional markets are
struggling, a well-managed hedge fund might still deliver
positive returns, acting as a “shock absorber” for a portfolio.
3. Risk management and capital preservation
As the name implies, many hedge fund strategies are designed
with risk management and capital preservation in mind. The
“hedging” aspect aims to protect against downside risk.
South African regulated hedge funds, especially Retail
Investor Hedge Funds, operate under strict regulatory
oversight by the FSCA. This includes limitations on leverage,
concentration and requirements for independent valuation
and robust risk management frameworks. This can often make
them more conservative than traditional long-only funds.
When traditional markets are
struggling, a well-managed
hedge fund might still deliver
positive returns , acting as a
“shock absorber” for a portfolio
4. Access to specialised expertise and strategies
Hedge fund managers are often highly experienced
professionals with specialised knowledge in various market
segments and complex trading strategies. Investing in a hedge
fund allows retail investors to access these professionals
and their sophisticated strategies that might otherwise be
unavailable to retail investors. This has been a significant
benefit of the introduction of the Retail Investor Hedge Fund
(RIHF). It could be seen as a masterstroke on the part of the
FSCA to “democratise” the hedge fund industry.
5. Enhanced liquidity (for RIHFs)
In line with this “democratisation”, the regulation of RIHFs has
led to these funds having daily pricing and daily repurchases.
This provides a level of liquidity that was historically not
always available with hedge funds, making them more
accessible and manageable for retail investors.
6. Tax efficiency (capital gains tax)
Similar to traditional unit trusts, profits from hedge funds are
generally subject to capital gains tax (CGT) rather than income
tax. This can be more tax-efficient for investors, especially
compared to investments that generate significant interest
income. It is also possible to “wrap” hedge funds in taxefficient
vehicles like endowments, retirement annuities and
living annuities.
DISADVANTAGES OF USING HEDGE FUNDS
1. Potentially higher fees
Hedge funds typically charge higher fees than traditional unit
trusts. This often includes a management fee (1-2% of AUM)
and a performance fee (a percentage of the profits generated
above a certain hurdle rate, eg 10-20%). While hedge fund
managers may argue that these fees are justified by their
specialised expertise and the potential for absolute returns,
higher fees do erode net returns.
2. Complexity and understanding
The strategies employed by hedge funds can be complex
and difficult for the average investor to fully understand.
Despite the robust FSCA and CISCA regularity oversight of
hedge funds, the complexity of hedge funds could be perceived
as a lack of transparency for some investors. It’s crucial for
financial planners to understand the specific strategies and risks
of the hedge fund they are considering for their clients and to
feel comfortable that they can explain this clearly to their clients.
3. Potential for underperformance
Despite their sophisticated strategies, hedge funds are not
guaranteed to outperform. Some may still deliver disappointing
returns, especially if the manager’s strategy does not align
with market conditions or if their investment calls are incorrect.
As with traditional long-only unit trust funds, past performance
is not indicative of future results and even highly skilled
managers can experience periods of underperformance.
4. Reliance on manager skill
Hedge fund performance is often highly dependent on the skill
and experience of the individual fund manager or team. If a key
manager or team member leaves or makes poor decisions, it can
significantly impact the fund’s returns.
5. Liquidity risk (for QIHFs and some older structures)
While RIHFs offer daily liquidity, some Qualified Investor Hedge
Funds (QIHFs) offer unregulated hedge fund structures that may
have less frequent redemption periods (eg monthly, quarterly,
or even longer lock-up periods). This can limit an investor’s
ability to access their capital quickly if needed.
6. Limited track records (for some funds)
While the South African hedge fund industry has matured,
some funds may still have relatively short track records
compared to established unit trusts. This can make it harder to
assess their long-term performance and consistency.
7. “Black box” perception
Despite regulatory efforts to increase transparency, some
investors may still perceive hedge funds as “black boxes”
due to the intricate nature of their strategies and the
proprietary trading methods employed.
For South African investors, hedge funds offer attractive
benefits in terms of diversification, potential for absolute
returns and professional risk management, especially with the
increased accessibility and regulation of RIHFs. However, these
benefits often come with higher fees, a need for a deeper
understanding of the strategies and the inherent risk that
any investment can underperform. It is vital for financial
planners and asset consultants to conduct a thorough due
diligence before allocating their client’s capital to hedge funds.
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Considerations for retail and
institutional investors when
incorporating hedge funds
into investment portfolios
A careful consideration of how hedge funds fit into an overall
investment strategy is crucial for both institutional and retail
investors, as is close attention to regulatory requirements.
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RETAIL INVESTORS
A retail investor should incorporate a hedge
fund into their investment portfolio if it
will help them achieve their goals. Ideally
retail investors would only make such an
investment under the guidance of a financial
planner. But the challenge that both financial
planners and their clients face when it comes
to investing, is to remember that investing is
not a competition but rather that it is a means
to an end. Which means the question financial planners
need to answer is, how will investing in a hedge fund help my
client achieve their investment goals? But before a financial
planner considers their client’s investment goals, ideally, they
will have their own house in order.
For financial planners, hedge fund investing starts at “home”
What does it mean for a financial planner to have their
house in order before recommending hedge funds to clients?
Firstly, it means that the financial planner has a clear investment
philosophy and process that allows for the appropriate use
of hedge funds. Secondly, that the financial planner abides by
the relevant regulatory requirements for hedge fund investing.
An investment philosophy that incorporates investing in
hedge funds
When considering the use of hedge funds for client portfolios,
a financial planner ideally should have a clear, documented
investment philosophy that incorporates the belief that there
is a place for hedge funds as an appropriate vehicle for helping
clients achieve their investment goals. In so doing, a financial
planner ideally will have adopted at least three core principles
or beliefs in their investment philosophy.
The importance of having
an investment philosophy
cannot be underestimated
Belief 1: It’s possible to generate positive returns in up and
down markets
The starting point for any investment plan, is for a financial
planner to have a clearly articulated investment philosophy
which outlines the key principles that they believe hold true
about investing. The importance of having an investment
philosophy cannot be underestimated, as it serves as a reference
point for all investment decisions. So, for a financial planner to
be comfortable investing in a hedge fund, one of the
fundamental investment beliefs they must hold is that it is
possible to generate positive returns in all market conditions.
This is a foundational principle for the use of hedge funds.
Belief 2: It’s possible to limit losses in down markets
A second principle would be that the financial planner believes
it is possible and important to limit losses when markets fall.
This may be particularly important for
clients who are drawing down on their
investments, such as those invested in
a living annuity. In long-only portfolios
diversification is generally the key
method used to limit losses when
markets fall, but a financial planner
who uses hedge funds will believe
that more can be done to limit the
downside in a client’s portfolio.
We are fortunate in South
Africa to have such advanced
regulation of hedge funds
which empowers both
financial planners and clients
to make informed choices
Belief 3: Diversification is key, but not just across asset classes
A third principle may be that they believe in diversification,
not just of asset classes, but of investment techniques or
strategies. It would be a mistake to consider the use of hedge
funds as simply the use of another asset class. Hedge funds are
not homogenous investment solutions. They are characterised
by a diverse range of strategies and investment techniques,
and it is important that financial planners understand not
only the mechanics of these, but also that they (and their clients)
are clear on the consequences these techniques may have for
their portfolios. For example, if a hedge fund is included in an
investment portfolio to act as a “shock absorber” to mitigate
downside movements in the portfolio, it must be accepted
that the portfolio will lag the market, and potentially other
investment options when the market moves positively.
With these three principles in place, the financial planner
has laid the foundation for the possibility of investing in a
hedge fund. Thereafter they can consider whether a hedge fund
is an appropriate solution for achieving client goals. It goes
without saying that a financial planner should not consider
using a hedge fund for a client unless they have a thorough
understanding of any hedge fund they may consider using.
During the technology bubble of the late 1990s and early
2000s, Warren Buffett said that he and Charlie Munger could
not invest in any technology companies because they didn’t
understand them. If the world’s greatest investor can steer
clear of an investment because of a lack of understanding,
the most capable financial planner can take comfort that
there is no embarrassment in doing the same if they do not
have a full understanding of the investment under consideration.
While historically hedge funds have had the reputation of
being “black boxes” and that you must just trust the outcome,
this is not the type of hedge fund in which a financial planner
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should be investing their clients’
money. We are fortunate in South
Africa to have such advanced
regulation of hedge funds which
empowers both financial
planners and clients to make
informed choices when
investing in a hedge fund.
A key potential benefit of
using a hedge fund is to offer
greater diversification
Meeting regulatory requirements for hedge fund investing
There are different ways to invest in a hedge fund. For
clients where Retail Investor Hedge Funds would be more
appropriate, the financial planner could invest directly into
a Hedge Fund CIS, if they are licensed for the “CIS Hedge Funds”
product category. A financial planner may also have clients
who “qualify” for Qualified Investor Hedge Funds, in which case
they are likely to invest directly into a QIHF. Again, they need
to be licensed for the appropriate product category.
A financial planner in South Africa needs to be authorised
by the FSCA under the specific product category 1.26
(Participatory Interests in Collective Investment Schemes –
Hedge Funds) to be legally permitted to advise clients on hedge
funds. This authorisation obviously indicates that the advisor
has met the necessary “fit and proper” requirements to
understand and advise on the complexities and risks associated
with hedge funds.
Financial planners without the 1.26 Participatory Interest
authorisation can, on certain platforms, use hedge funds
that are run through a life licence, eg Living Annuity or
Endowment, but generally they are not allowed to advise
on hedge fund investments in discretionary portfolios or
Retirement Annuities.
Having got one’s own house in order, the financial planner
is well positioned to consider the client-specific factors which
are relevant in determining whether a hedge fund is appropriate
for incorporating into a client’s investment plan.
Client factors to consider when deciding if a hedge fund
is appropriate
Investment objectives and goals
If investing is a means to an end, then it is about helping clients
achieve both their life and financial goals. This means the key
question to consider is: What does the client hope to achieve by
investing in a hedge fund? Is it absolute returns, diversification,
capital preservation, or a specific exposure? The hedge fund’s
strategy must align with these goals.
Risk required, tolerance and capacity
Given that hedge funds are generally considered higher risk than
traditional investments the financial planner must thoroughly
assess the client’s risk profile. This is a three-dimensional
assessment which incorporates the following:
• What is the risk that is needed for the client to take on (risk
required) in order to achieve their investment goal?
• How resilient is the client’s psychological willingness (risk
tolerance) to take on the risk that will be associated with the
hedge fund investment?
• What is the client’s financial ability to withstand potential
losses (risk capacity) considering their time horizon, wealth
level and income stability?
Liquidity needs
In South Africa, financial planners are fortunate to be able to
access Retail Investor Hedge Funds which provide daily liquidity.
But if they are considering using a Qualified Investor Hedge
Fund, they would need to ensure that the client is comfortable
with the greater illiquidity of these funds, which may only
allow redemptions every 30 or 90 days. The financial planner
must ensure the client's liquidity needs are met, and they are
comfortable with the illiquidity inherent in the QIHFs.
Existing portfolio and diversification
How will the hedge fund fit into the client’s overall investment
plan and existing portfolio? Does it offer true diversification
by having a low correlation to existing assets? A key potential
benefit of using a hedge fund is to offer greater diversification.
If a financial planner intends to include more than one hedge
fund, they should aim to select funds that are uncorrelated with
each other and with broader market movements.
If investing is a means to an
end, then it is about helping
clients achieve both their
life and financial goals
Tax considerations
Depending on how the client accesses the hedge fund, whether
directly into a CIS as a discretionary investment, or via an
investment vehicle like an Endowment or RA, the financial
planner will need to consider the impact on the client’s overall
tax situation.
Regulatory factors
Regulations do influence when a financial planner can
consider using a hedge fund in a client portfolio. For preretirement
Regulation 28 compliant portfolios, up to 10% of
the portfolio can be invested in hedge funds, with up to 5% in
a single fund of hedge funds, and up to 2.5% in an individual
hedge fund. There is no regulatory limit on the use of
hedge funds in Living Annuities or in Discretionary Investments.
At this stage hedge funds are not allowed to be used in a Tax-Free
Savings Account.
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2025 HEDGE FUND GUIDE - INTRODUCTION
INSTITUTIONAL INVESTORS
Widely seen as the pioneer of institutional investing in hedge
funds is the Yale University Endowment Fund in the US. David
Swensen managed Yale’s endowment for over 35 years,
under “The Yale Model”, a framework for institutional investing
that he developed alongside then senior endowment
director Dean Takahashi. The Yale Model has remained the
University’s primary investing scheme – and has become the
industry standard over the last three decades.
The Yale Model favours broad diversification of assets,
allocating less to traditional US equities and bonds and more
to alternative investments like hedge funds, private equity,
venture capital and real estate. This approach has generated
exceptional long-term returns, consistently outperforming
other large institutional investors. Other large US university
endowments such as Harvard, Stanford, Princeton, MIT and
others have followed Yale’s lead in successfully incorporating
hedge funds into their portfolios for diversification and
enhanced returns. The move to hedge funds can be seen in the
shift in the Yale Endowment’s asset allocation over time, from
1989 when the endowment had 75% of its assets invested in
US equities, bonds and cash; to 2019 when the Yale Endowment
had over 60% of its assets invested in alternative investments.
South African retirement funds and institutional investors
don’t have the same level of flexibility as The Yale Model
provides. South African retirement funds have to adhere
strictly to the prudential investment limits and operational
requirements stipulated by Regulation 28 of the Pension Funds
Act of 1956 and the broader regulatory framework under CISCA.
The specific provisions of Regulation 28 regarding hedge funds
were significantly updated relatively recently and came into
effect in January 2023.
The amendments introduced a clear definition of a “hedge
fund” that aligns with the Collective Investment Schemes
Control Act (CISCA). This means that for an investment vehicle
to be considered a hedge fund under Regulation 28, it must
be registered and regulated as a Collective Investment Scheme
(CIS) in South Africa.
Regulation 28 now explicitly sets a maximum aggregate
exposure of 10% of the fair value of a retirement fund’s total
assets that may be invested in hedge funds. This limit was
previously bundled with private equity and other “excluded
assets” under a collective limit of 15%, but the 2023 amendments
separated these categories.
While Regulation 28 primarily focuses on the aggregate limit,
industry practice and guidance from
the FSCA (Financial Sector Conduct
Authority) provide implicit sub-limits
for diversification within the hedge
fund allocation:
• Fund of Hedge Funds: A
retirement fund typically has a
maximum allocation to a fund
of hedge funds (a portfolio
that invests in other hedge funds)
of 5%.
• Single Hedge Fund: A
maximum allocation to
any single hedge fund is
usually limited to 2.5%.
These sub-limits ensure
that even within the hedge
fund allocation, there is
sufficient diversification across
different strategies and managers,
mitigating concentration risk.
Regulation 28 applies the “look-through” principle to ensure
that funds cannot circumvent investment limits by investing
in an intermediary vehicle that then invests in restricted assets.
However, for hedge funds (and private equity funds), the
amendments generally state that a fund does not need to apply
the look-through principle in respect of the underlying assets
of the hedge fund. Instead, the investment into the hedge
fund itself is disclosed as an investment into the “hedge fund”
asset class, and it counts towards the 10% limit.
The “look-through” exemption for hedge funds and private
equity funds does not, however, apply if the underlying
investments of the hedge fund are in infrastructure assets. In
such a case, the exposure to infrastructure through the hedge
fund will count towards the overall infrastructure limit (45%)
set in Regulation 28. This prevents funds from using hedge funds
to bypass infrastructure investment limits.
Regulation 28 explicitly prohibits retirement funds from
investing in crypto assets (directly or indirectly), reflecting
concerns about their volatility and unregulated nature. This
means that the look-through exemption is unlikely to apply to
a hedge fund that primarily invests in crypto assets, which
means such a hedge fund would probably not be permissible for
a retirement fund.
Hayden Reinders, convenor of the ASISA Hedge Funds
Standing Committee, hopes that with increased attention
on hedge funds, their track record as Collective Investment
Schemes and their consistent performance will encourage
local retirement funds to take up the full 10% asset allocation
into hedge funds. He says, “Although the amendments to
Regulation 28 of the Pension Funds Act, allowing local pension
funds to invest 10% of assets into hedge funds, came into effect
at the beginning of 2023, most retirement funds are nowhere
near the 10% maximum, which means there is plenty of room
for growth.”
The regulatory provisions of Regulation 28 and CISCA with
respect to hedge funds ensure that a retirement fund’s hedge
fund allocations are within approved limits and managed
with appropriate oversight and transparency. It means that
a retirement fund is unlikely to do significant damage to
their overall portfolio if they get their hedge fund selections
wrong. But more importantly, with a robust due diligence
process, retirement funds can use hedge funds to enhance the
diversification of their overall portfolio and take advantage
of the opportunity to generate absolute returns and increase
downside protection. This gives the retirement fund the benefit
of enhancing risk-adjusted returns for the overall portfolio.
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2025 HEDGE FUND GUIDE - INTRODUCTION
Choosing the right hedge fund
Investment strategy, track record, risk management, investment team, fees
and a thorough due diligence are key considerations when choosing a
hedge fund.
Whether one is selecting a hedge fund for an
institutional client or retail client, it is important
to recognise that it is a complex process that
requires thorough due diligence and a deep
understanding of both the client’s needs and the intricacies
of hedge fund investing. The factors that should be considered
in selecting a hedge fund apply to both the retail and
institutional market, although there will be regulatory
nuances which a financial planner or an asset consultant and/
or retirement fund trustee need to be aware of. The choice
of hedge fund comes after the financial planner or asset
consultant/retirement fund trustee has determined that a
hedge fund is appropriate for a client’s portfolio. The factors to
be considered when making this choice include the following:
Investment strategy and philosophy
• Clarity and consistency: Does the fund have a well-defined
and consistently applied investment philosophy and
process? In order to understand the extent to which a fund
applies its philosophy and process consistently does require
a reasonable period of time for it to develop a track record.
• Market focus: What markets, asset classes and techniques
does the fund employ? It’s important to note that even if
funds invest for example in the same asset class, say equities,
there could be significant differences in how managers
employ different levels of leverage or different degrees of
directional bias – do they tend to be net long, net short or
neutral on equity? For example, one manager could have
a clear directional bias and be highly leveraged, while
another manager may have no directional bias and very
little leverage.
• Competitive edge (alpha source): How does the fund
generate its returns? What is its unique advantage or
“edge”? For example, one fund manager may believe their
ability in forensic accounting gives them an edge when
shorting equities while another manager may believe their
sector-specific experience gives them an advantage in going
long only equities.
• Correlation: How correlated are the fund’s returns to
traditional markets? Does it offer the desired diversification,
not only to the market, but to other hedge funds as well?
Performance and track record
• Absolute and risk-adjusted returns: It’s always important
to analyse historical returns, but always in the context of
the risks taken. In doing so one can look beyond headline
returns to metrics like Sharpe ratio, Sortino ratio and other
risk-adjusted performance measures. Importantly, returns
and risks taken need to be considered with reference to
the manager’s stated philosophy and process. Alignment
between what they say they do, and what they actually do is
key. It’s all about walking the talk.
• Consistency: How consistently has the fund delivered
positive returns?
• Drawdowns: What are the historical maximum drawdowns?
How long did it take to recover from them? This is a crucial
measure of risk.
• Length of track record: A longer track record generally
provides more data for analysis and though past
performance is not indicative of future results, it does help
determine whether the manager is walking the talk.
• Dispersion: Hedge funds are not a homogenous investment
or asset class. There is a wide dispersion of returns within
the hedge fund industry and even within specific strategies,
which makes manager selection so important. An indication
of the dispersion of returns in the South African hedge
fund market can be seen from the performance graphic
below taken from the 2023 Novare Hedge Fund Survey.
The graphic shows a box and whisker plot illustrating the
performance of various hedge fund strategies in South
Africa for 2023. Each box represents the range of returns
for a specific strategy, with the median indicated by a line
inside the box and the average performance denoted by a
black dot. Outliers are marked as individual points.
Returns for 2023
Average hedge fund performance in relation to
strategies, 2023
Market neutral Long/Short equity Fixed income Multi-strategy
Source: Novare Hedge Fund Survey, 2023
The following insights can be gleaned from the performance
graphic about the respective strategies:
18

2025 HEDGE FUND GUIDE - INTRODUCTION
Market neutral
With returns clustering between 5% and 15% the performance
is stable and tight distribution suggests consistent returns
with minimal outliers. The average performance was around
10.5%, which is steady but slightly lower compared to fixedincome
and multi-strategies.
Long-short equity
This is the biggest strategy by assets in the SA hedge fund
industry with returns extending from just below 0% to
almost 30%. This strategy showed a wider range of
performance. The median performance was about 8.9%,
though there were several outliers on the higher end,
indicating that some managers in this strategy can outperform
their peers. This approach offers the highest potential for
returns, but also comes with higher variability.
Fixed income
The fixed-income strategy returns showed relatively low
variability, with returns generally ranging from 5% to 15%
and an average return close to 12%. Despite some outliers on
both the low and high ends, the majority of funds in this
strategy performed within a narrow range, reflecting a more
conservative, predictable return profile.
Multi-strategy
As one might expect, multi-strategy funds had a diverse return
profile from 0% to over 20%, with the median return at about
10.8%. There are several high-end outliers, indicating that
certain multi-strategy funds achieved exceptional results in
2023. This suggests that skilled managers were able to identify
opportunities in different asset classes and capitalised on them.
The strategy offers a balance between risk and reward by being
flexible in allocation from equities to fixed-income instruments.
Risk management
• Robust framework: Does the fund have a sophisticated and
robust risk management framework in place?
• Stress testing: How does the fund stress test its portfolio under
various market scenarios?
• Leverage: How does the fund use leverage and what is its
potential impact on risk and returns?
• Transparency: While hedge funds are typically less transparent
than unit trust funds, the investor along with their financial
planner or asset consultant should seek sufficient transparency
to understand the fund’s exposures and risk profile.
Team and organisation
• Experience and expertise: What is the experience and
track record of the investment team, particularly the key
decision-makers?
• Key person risk: Is the fund overly reliant on a single individual?
What succession plans are in place?
• Operational infrastructure: Does the firm have a robust
operational infrastructure, including back-office support,
compliance and cybersecurity?
• Culture: How supportive is the fund manager’s business
culture of the investment professionals’ ability to deliver
on their mandate? How much employee turnover has the
business experienced?
• Financial stability: How stable is the business financially?
A business that is under financial pressure can be a catalyst
for putting pressure on fund managers to generate
performance and higher fees, which could lead to greater
risk-taking by managers.
Fees and structure
• Fee structure: Understanding the management fees,
performance fees and any other expenses is critical so that it
is clear what the net return to the investor will be. Comparing
these to industry averages is important, as well as being
clear on what value is provided.
• Alignment of interests: Are the fees structured in a way that
aligns the fund manager’s interests with the clients? The
quantum and structure of performance-based fees can be a
good indicator.
• Liquidity terms: Less relevant to Retail Investor Hedge
Funds, but very relevant to Qualified Investor Hedge Funds
as well as institutional clients like retirement funds who
may give hedge fund managers a segregated mandate. In
these instances, it is important to be clear on potential
restraints on liquidity, like lock-up periods or notice periods
for withdrawals.
• Minimum investment: More relevant to Qualified Investor
Hedge Funds and retirement funds, it is important to be
cognisant of minimum investment requirements and
whether this suits the investor or not.
Operational due diligence
• Independent oversight: Are there independent administrators,
auditors and custodians?
• Regulatory compliance: Is the fund compliant with all
relevant regulations (eg Regulation 28 of the Pensions Fund
Act and/or CISCA)?
• Service providers: Assess the quality and reputation of
the fund’s service providers (eg auditors and administrators).
By carefully considering these factors, financial planners and
asset consultants can increase the likelihood of selecting
hedge funds that align with investors’ financial goals and risk
appetites, ultimately contributing to a well-diversified and
robust investment portfolio.
But hedge fund selection is not a one-off event, so after
investing in a hedge fund, the financial planner or asset
consultant must continuously monitor the fund’s performance,
risk profile and adherence to its stated strategy. To do this
effectively, regular communication with the fund manager is
key, to ensure being up to date on market views, portfolio
changes and any significant developments.
It is also critical to reassess the hedge fund’s suitability for
the investor’s portfolio in light of changing market conditions
and economic outlook, as well as the investor’s changing needs.
19

2025 HEDGE FUND GUIDE - FOCUS
The role of Absa
Prime Brokers in the
hedge fund industry
Introduction
Hedge funds in South Africa are investment vehicles that pool
capital from accredited investors and institutions to invest in
a variety of assets, often employing complex strategies and
leverage to maximise returns. The structure and regulation
of hedge funds in South Africa are governed by various
regulatory bodies, including the Financial Sector Conduct
Authority (FSCA). Hedge funds are a variant of a Collective
Investment Scheme (CIS), issued under an arrangement with a
Management Company (Manco) in a co-named arrangement. A
Manco’s responsibilities include regulatory oversight, ensuring
compliance, managing risks and facilitating investment
management. They also act as a link between the fund’s trustees
and investors, ensuring transparency and accountability.
A prime broker is generally a large financial institution
that assists hedge funds facilitate the implementation of the
investment strategy. They offer a range of services like executing
trades, clearing and settling transactions, keeping custody of
assets, providing loans and financing, and lending securities for
the cover of short positions. These services allow hedge funds
to concentrate on their investment strategies without worrying
about the operational details.
Hedge funds depend on
prime brokers for access to
balance sheets to implement
portfolio leverage
Introduction to prime brokerage
The relationship between a prime broker and a hedge fund is
mutually beneficial. Hedge funds depend on prime brokers for
access to balance sheets to implement portfolio leverage, which
helps them increase their investment positions and potentially
earn higher returns. In return, prime brokers earn fees and
interest from the services they provide. This partnership works
well because both parties benefit from the hedge fund’s success.
Prime brokers also offer valuable market insights, research
and risk management tools that help hedge funds make better
investment decisions and manage their portfolios effectively.
This added support strengthens their relationship, as hedge
funds rely on the expertise and resources of their prime brokers.
It is important that a hedge fund consider the strength of
the prime broker’s balance sheet to ensure that the portfolio
will not be put at risk should there be financial issues with the
prime broker. Equally so, the prime broker needs to consider
the hedge fund investment strategy and extension of leverage
to avoid situations where excessive gearing or liquidity issues
may impact its ability to finance the portfolio.
Core Services Provided by Prime Brokers
Trade execution and clearing
Prime brokers play a crucial role in facilitating trade execution
for hedge funds, ensuring swift and accurate trades. They also
handle the clearing process, ensuring that transactions settle
correctly and efficiently.
Not only does Absa Prime Brokers offer access to all local
markets (equities, bonds, derivatives), it also offers full access
to offshore markets allowing South African hedge funds to
take positions globally. This gives managers a greater chance
in utilising strategies that might not be applicable to South
Africa due to the relevant size of our markets.
Custody services
Prime brokers provide custody services, safeguarding hedge
fund assets and ensuring accurate record-keeping. They also
20

2025 HEDGE FUND GUIDE - FOCUS
assist in aggregating risk, providing reporting and analytics
to help hedge funds manage their portfolios effectively, while
reporting the required data to the management company of
the hedge fund.
Prime brokers play a crucial
role in facilitating trade
execution for hedge funds
Financing and leverage
Prime brokers offer financing options to hedge funds, allowing
them to leverage their investments. This includes margin
financing, which enables funds to borrow against their assets
to increase their exposures to other assets with the aim of
increasing returns. Hedge funds can also use this funding
mechanism to settle trades or margin calls leaving the hedge
fund to keep exposures in other assets that outperform the
lending rates charged by the prime broker.
The prime brokerage market is becoming increasingly
competitive, with more scrutiny of size and quality of the
balance sheet backing prime brokers. This could impact service
levels and pricing, requiring hedge funds to carefully evaluate
their prime brokerage relationships to ensure they are not
adding additional risks to their funds outside their market
risk allocations.
Conclusion
In summary, prime brokers play a vital role in supporting
hedge funds by providing essential services and resources.
Their relationship is built on mutual dependence and shared
interests, with both parties benefiting from each other’s
success. However, it’s important to manage the risks to ensure
smooth operations.
Trade execution and clearing
Prime brokers facilitate securities lending, allowing hedge funds
to borrow securities for short selling. This service is crucial for
funds that employ short-selling strategies to capitalise on
market inefficiencies. The securities are usually lent by longterm
holders (such as pension funds) allowing them to earn
extra fees on otherwise dormant holdings.
Risk management and reporting
Prime brokers provide risk management services, offering tools
and analytics to help hedge funds assess their risk exposure.
Additionally, they supply comprehensive reporting to ensure
transparency and compliance. There are often benefits that a
prime broker can introduce to hedge funds such as the efficient
management of collateral that will minimise the impact of
charges on the underlying portfolio.
Prime brokerage relationships with hedge funds
Prime brokers typically charge fees based on the services
provided, which may include commissions on trades, asset
management fees and financing charges. Understanding
fee structures is vital for hedge funds to manage costs.
Counterparty risk is a significant concern in prime brokerage
relationships. Hedge funds must work closely with their prime
brokers to assess and manage these risks to ensure financial
stability. Prime brokers significantly influence the hedge fund
industry by enhancing operational efficiency, supporting fund
growth and navigating the complex regulatory landscape.
Future trends and challenges in prime brokerage
Technological advancements and the integration of fintech
solutions are transforming the prime brokerage landscape.
Prime brokers must adapt to these changes to remain
competitive and meet the evolving needs of hedge funds.
Chris Edwards is the Managing Director and Head of the Prime
Services, and the Index & Structured Solutions businesses at Absa
Bank Ltd. Chris has accumulated over 25 years of experience within
financial services with a focus on global markets, alternative asset
management and, more recently, the structured products sectors.
Working for leading firms such as Morgan Stanley and now Absa,
Chris has spent the past 15 years conceptualising, building and
working with businesses to serve these market sectors. During this
time, Chris has dealt with financial regulators across UK, Africa
and Asia, served on several boards and industry forums both as
an independent director and in an advisory capacity.
21

2025 HEDGE FUND GUIDE - PROFILE
Amplify Investment Partners
Based in Tygervalley, Cape Town,
Amplify Investment Partners is a
registered discretionary Financial
Services Provider, which holds
a FAIS Category I, II and IIA licence (FSP
No. 712). It has been in existence since
1993 and provides a holistic suite of
investment products to all investors.
Amplify Investment Partners (renamed in
December 2019), previously known as Blue
Ink Investments (Pty) Ltd, a wholly owned
subsidiary of Sanlam Investments Holdings,
has historically been a hedge fund asset
manager, focused on researching and
utilising asset managers’ capabilities across
multi-disciplined strategies, which have
gathered significant interest from both the
general public and institutional investors.
Investment philosophy
Amplify’s investment philosophy is to
create solutions, especially in light of
volatile and uncertain markets, through
skilful portfolio construction empowered
by a deep understanding of investment
styles and market regimes to deliver
the best outcomes for investors. This
is achieved through a sophisticated
portfolio construction process offering
multiple levels of diversification between
underlying managers, differing strategies
and styles and asset classes.
Implications for financial planners and
their clients
Amplify will continue to ensure that
the underlying sub-advised managers
are best in class, providing industryleading
investment capabilities. Should
any material concerns emerge, Amplify
may replace the underlying sub-advised
asset manager to reflect their best ideas.
Amplify aims to be a trusted, investmentled
organisation with whom financial
planners and their clients can partner with
in full confidence.
Trust the process
The manager selection process aims to
identify managers with skill in a specific
22
FUND NAME FUND CLASSIFICATION RISK PROFILE FUND MANAGER
Amplify SCI Real Income Retail
Hedge Fund
Amplify SCI Cautious Retail
Hedge Fund
Amplify SCI Diversified Income
Retail Hedge Fund
Amplify SCI Absolute Income
Retail Hedge Fund
Amplify SCI Stable Income Retail
Hedge Fund
Amplify SCI Income Plus Retail
Hedge Fund
Amplify SCI Enhanced Equity
Retail Hedge Fund
Amplify SCI Property Retail
Hedge Fund
Amplify SCI Managed Equity
Retail Hedge Fund
Amplify SCI Active Equity Retail
Hedge Fund
Retail Hedge Fund – Worldwide
Multi-Strategy
Retail Hedge Fund – South African
Fixed Income
Retail Hedge Fund – South African
Fixed Income
Retail Hedge Fund – South African
Fixed Income
Retail Hedge Fund – South African
Fixed Income
Retail Hedge Fund – South African
Fixed Income
Retail Hedge Fund – South Africa Long
Short Neutral
Retail Hedge Fund – South African Long Short –
Variable-bias long/short equity Hedge Fund
Retail Hedge Fund – South Africa Long Short
Long Bias
Retail Hedge Fund – South African Long/Short
Equity Long Bias
asset class or strategy. Amplify uses a tried
and tested framework when assessing
potential managers as they believe this
structure helps to ensure a repeatable
investment process. It also ensures
analysts remain disciplined in terms of the
screening steps they apply and the team
engages in rigorous debates to test and
challenge each other’s thinking. They use
a disciplined process to screen through the
available universe of managers and select
those with true skill and who outperform
reasonable return expectations given their
investment style.
Products on offer
Amplify Investment Partners offers a range
of long-only and hedge funds. The longonly
range of funds spans fixed income,
multi asset, local equity, local property and
global equity (ZAR and USD). The hedge
fund range spans fixed income, long/short
equity, multi strategy and property. Amplify
firmly believes in the portfolio construction
benefits of hedge funds in investment
portfolios. They're constantly looking for
institutional-quality hedge funds to bring
to retail investors in South Africa.
Performance
At Amplify Investment Partners, pride
is placed in the performance of their
solutions, both long-only and hedge. Their
funds have an established track record of
Cautious
Cautious
Moderate
Aggressive
Cautious
Moderate
Moderate
Aggressive
Cautious to
Moderate
Moderate
Aggressive
Moderate
Aggressive
Marble Rock Asset Managers
Southchester Investment Managers
Terebinth Capital
Acumen Capital
Ninety One
Matrix Fund Managers
All Weather Capital
Catalyst Fund Managers
Oyster Catcher Investments
AG Capital
What matters is being
able to create an impact
that’s sustainable
robust performance across market cycles,
resulting in a variety of awards. What they
believe is that life is about more than
returns. It’s about achieving a balance
between realising financial hopes and
dreams, and creating sustainable impact for
future generations. What matters is being
able to create an impact that’s sustainable
and long-lasting. To achieve this, Amplify
subscribes to the UN’s Sustainable
Development Goals (SDGs) which aims to
transform our world by addressing gender,
social, economic and environmental issues.
To do this, they've chosen to focus their
efforts on creating impact using SDGs that
are aligned to their values, much in the
same way that all the SDGs are aligned to
the United Nations General Assembly goal
of transforming the world by 2030.
Contact information:
• Wade Witbooi, Managing Director
• Telphone: 021 950 2689
• Email: wade@amplify.co.za
• Website: www.amplify.co.za
Amplify Investment Partners (Pty) Ltd is an authorised Financial Services Provider (FSP 712).
Sanlam Collective Investments (RF) (Pty) Ltd is a registered and approved Manager in terms of the Collective Investment Schemes Control Act. Collective investment schemes are
generally medium- to long-term investments. Past performance is not necessarily a guide to future performance, and the value of investments/units /unit trusts may go down as well
as up. A schedule of fees and maximum commissions is available from the Manager on request. Collective investments are traded at ruling prices and can engage in borrowing and
scrip lending. The Manager does not provide any guarantee with respect to either the capital or the return of a portfolio. The manager has the right to close the portfolio to new investors
to manage it more efficiently in accordance with its mandate. Income funds derive their income primarily from interest-bearing instruments. The yield is current and is calculated daily.

2025 HEDGE FUND GUIDE - INTERVIEW
Investment partnerships
breed hedge fund excellence
Amplify Investment Partners’ managing director Wade Witbooi explains
the value that Amplify brings to the table and predicts a bright future for
both his business and the industry as a whole.
What makes your business distinctive?
Our managers have a hedge fund mindset in their
DNA, so this is how they think when they view
market opportunities regardless of whether the
market is up or down on a specific day, month or
year. The managers we partner with operate with
full degrees of freedom and have demonstrable
track records of hedge fund management over
time in changing markets. They are selected after
in-depth due diligence, evaluating qualitative and
quantitative metrics and assessing whether those
past or observed successes will be replicable in
future, and whether their environment and
business structure are set up for the process to
be replicated.
What is your core belief at Amplify
Investment Partners?
Hedge funds across multiple styles can add
demonstrable benefits to portfolio construction
for investors, whether they are in the accumulation
phase or decumulation phase of their
financial plan. We look for unique sources of
alpha to provide portfolio construction benefits
to investors.
We allow access to
multiple strategies, be
they in fixed income
or the equity space
What does your track record look like?
While the Amplify name is relatively new, we
have a long and proven track record in manager
selection. Amplify (then named Blue Ink) was the
dedicated hedge fund research and investment
team within Sanlam Multi Managers. We believe
our manager selection track record, our diverse
fund range, and our expertise in an industry
which comes with complexities is a competitive
advantage. We don’t subscribe to one view,
style or philosophy. We allow access to multiple
strategies, ranging from fixed income to equity.
Amplify is well
positioned to attract
flows due to the quality
and skill of the managers
we have partnered with
What is your current view of the industry as
we head deeper in 2025?
Industry assets continue to tick up strongly, and
the number of managers and their capabilities
have increased, so there is a lot of runway. Amplify
is well positioned to attract flows due to the quality
and skill of the managers we have partnered with
for our hedge fund range. Previously, investments
into hedge funds were reserved for a certain
cohort of clients, but now, due to the advent of
the retail hedge fund industry and businesses like
ours, there is greater access on a greater number
of platforms for investors for their consideration.
What does the future hold for Amplify
Investment Partners and the industry?
The regulator currently has a limit on the amount
of hedge fund exposure for pre-retirement
clients (Regulation 28), something which has
the potential to be revised over time as hedge
funds continue to display portfolio construction
benefits. The investable universe is growing,
the regulatory environment is becoming more
supportive and financial advisors continue to
evolve their portfolio construction process. These
factors are all leading to potential continued
growth in the industry, and we at Amplify sit in a
unique position with a diverse suite of funds and
all the experience and knowledge as a business to
help investors on their journey.
Wade Witbooi,
Managing Director,
Amplify Investment Partners
BIOGRAPHY
Wade Witbooi heads Amplify
Investment Partners, bringing
over 15 years of investment
experience and a passion for
making a difference in South
Africa. His expertise in investment
management and commitment
to providing superior investment
products while striving to protect
our natural bounty make him a
driving force in Amplify's mission
to create meaningful impact.
If the fund holds assets in foreign countries it could be exposed to the following risks regarding potential constraints on liquidity and the repatriation of funds: macro-economic, political, foreign exchange.
The Manager retains full legal responsibility for the third party named portfolio.
While CIS in hedge funds differ from CIS in securities (long-only portfolios) the two may appear similar, as both are structured in the same way and are subject to the same regulatory requirements. The ability of a portfolio
to repurchase is dependent upon the liquidity of the securities and cash of the portfolio. A manager may, in exceptional circumstances, suspend repurchases for a period, subject to regulatory approval, to await liquidity
and the manager must keep the investors informed about these circumstances. Further risks associated with hedge funds include: investment strategies may be inherently risky; leverage usually means higher volatility;
short-selling can lead to significant losses; unlisted instruments might be valued incorrectly; fixed income instruments may be low-grade; exchange rates could turn against the fund; other complex investments might
be misunderstood; the client may be caught in a liquidity squeeze; the prime broker or custodian may default; regulations could change; past performance might be theoretical; or the manager may be conflicted.

2025 HEDGE FUND GUIDE - PROFILE
Bateleur Capital
Bateleur Capital was founded by
Kevin Williams in 2004, launching
with a long/short hedge fund
and R11-million in seed capital.
The Cape Town-based, 100% ownermanaged
business chose the hedge fund
structure because they believed it was
the most suitable vehicle for protecting
investor capital while providing a largely
unconstrained investment universe – a
philosophy they continue to uphold 20
years later.
Meet the team
Kevin Williams is the founder and CIO and
has been in financial markets since 1996,
having previously worked on the sellside
for various international investment
banks. The investment team is made up of
10 people, which consists of five portfolio
managers and five investment analysts.
The business has grown steadily to its
current complement of 17, ensuring that
they are well positioned for responsible
growth. The team cumulatively has over
200 years of industry experience.
We’ve delivered
20 years of
outperformance
while protecting
capital, with one of
the longest-running
hedge funds in
South Africa
Investment philosophy
Bateleur Capital prides itself on its
consistent and meticulous approach,
combining fundamental analysis with
a top-down macro-overlay; leveraging
their hedge fund background to deliver
competitive returns while placing a
24
The team
cumulatively has
over 200 years
of industry
experience
strong emphasis on capital preservation.
Their funds aim to keep pace with equity
markets in good times and protect capital
in periods of market stress – which they
believe will lead to outperformance over
the medium to long term and deliver
consistent real returns.
Investment framework
A robust fundamental framework
underpins the process for potential
investments, which utilises a fourquadrant
approach analysing quantitative
and qualitative factors among other
metrics – this is followed by robust
debate within the investment team. The
flat organisational structure of the business
enables swift and decisive implementation
of their investment decisions, which
sets them apart from larger institutional
asset managers.
Client focus
Bateleur Capital believes every client has
different wants and needs when it comes
to the level of interaction and service they
require, and it is their responsibility to
understand this and handle accordingly.
In addition, they partner with and lean on
DFMs to give them a platform to interact
and engage with financial advisors. The
business has some exciting projects in
the pipeline which they believe will help
them to reach the end client in a more
interactive manner, given the retail market
is a big focus of theirs.
Importance of hedge funds
Hedge funds are the foundation that built
Bateleur Capital, despite currently being
a small percentage of their assets under
management, and they believe that
leveraging their hedge fund background
gives them an edge over both their
competitors and larger institutional asset
managers. The hedge fund industry in
South Africa is growing significantly as the
products become more accessible to retail
investors and the benefits of including
them in one’s portfolio become difficult
to ignore.
Bateleur Capital’s
funds aim to keep
pace with equity
markets in good
times and protect
capital in periods
of market stress
Products and performance
Bateleur Capital has delivered 20 years
of outperformance while protecting
capital, with one of the longest-running
hedge funds in South Africa. They offer
three different hedge fund products,
among other unit trusts and equity-only
mandates, namely the Long Short, Market
Neutral and Special Opportunities. Their
award-winning flagship hedge fund – the
Bateleur Long Short Prescient RI Hedge
Fund – has delivered a return of 17.9%
over the past year, and 14.6% annualised
since inception.
Contact information:
• Caylin Korff
• Telephone: 021 681 5077
• Email: info@bateleurcapital.com
• Website: www.bateleurcapital.com

2025 HEDGE FUND GUIDE - PROFILE
Blue Quadrant
Capital Management
Blue Quadrant Capital Management
is a Cape Town-based,
owner-managed asset manager.
It was founded in 2010 with the
intention of creating an asset management
business that looked beyond the market
noise and anticipated and positioned
for longer-term economic and industry
trends. Blue Quadrant currently has around
R900-million assets under management.
Investment team
Leandro Gastaldi leads the investment
team and has been responsible for
portfolio management since Blue
Quadrant’s inception. He has a BCom
Honours degree from UCT and is a CFA
charterholder. Pierre Desmidt acts as
the fund’s portfolio advisor and works
closely with Leandro on idea generation
and research.
Matthew Robarts is responsible for
fundamental research and analysis. He
is a chartered accountant with substantial
experience in the financial
services sector, having worked as an
auditor for EY. This experience gave
him valuable exposure to the banking
sector and regulatory compliance in
the industry. The investment team is
further supported by Jürgen Möller, who
assists with quantitative analysis and risk
management. Jürgen holds an MCom
from Stellenbosch University and is a
CFA charterholder.
Philosophy and process
Our core investment philosophy can
be described as “Macrovalue”, which
combines traditional valuation with
macroeconomic or industry thematic
analysis. This approach allows us to
identify companies that are not
only undervalued, but also stand to
benefit from an expected favourable
shift in macroeconomic or industry
fundamentals. These long trades are
supplemented with CTA-like positions as
well as an equity short book and select
26
event-driven opportunities that combine
to generate a return profile uncorrelated
with traditional equity benchmarks or
long-only equity funds.
Equity exposure
may vary,
depending on existing
market and economic
conditions and
available investment
opportunities
Suitable investment opportunities are
identified by screening for companies
that trade below our estimate of intrinsic
value, which is based on our assessment
of fair median value over a complete
economic or industry cycle.
Macroeconomic and industry trends
are evaluated to estimate the likely
timeframe within which these companies
may re-rate to fair value. Qualitative
factors, including the quality of the
company’s management team, are also
considered when determining a suitable
discount rate for the given level of risk.
Our macroeconomic and industry
research sometimes leads to the
development of a thematic thesis. We
then look for undervalued equities
to express this theme. Value traps are
avoided by ensuring that the alignment
in the macroeconomic, industry and
company fundamentals favour a re-rating
for selected equities, sooner rather
than later.
We believe our process and
philosophy to be fairly unique, offering
us the ability to generate returns that
are uncorrelated to offerings from
other managers. This provides clients
and advisors additional opportunity to
diversify their investment portfolios.
Blue Quadrant Capital Growth
Prescient RI Hedge Fund
The Blue Quadrant Capital Growth
Prescient RI Hedge Fund aims to generate
sustainable real returns over the long term.
Although it has a substantial equity bias,
the fund’s mandate allows for some
flexibility to diversify into other asset
classes, including unlisted investments.
Equity exposure may vary, depending
on existing market and economic
conditions and available investment
opportunities. Direct and indirect
equity exposure will vary between a
minimum of 0% and a maximum of 150%
(including unlisted equity investments) of
the fund’s total nominal value.
The Blue Quadrant Capital Growth
Prescient RI Hedge Fund was launched
in May 2011 and received three awards
for its long-term performance between
2021 and 2023.
Performance:
Blue Quadrant Prescient RI Hedge Fund
performance up to 30 June 2025
PERIOD
RETURN
Year to date 0.47%
1 Year 1.70%
3 Year 12.78%
5 Year 35.78%
10 Year 19.69%
Since Inception 18.16%
RETURNS FOR PERIODS LONGER THAN 12 MONTHS
ARE ANNUALISED.
Contact information:
• Susan Byrne
• Telephone: 087 700 3517
• Email: info@blueqcm.com
• Website: www.blueqcm.com

2025 HEDGE FUND GUIDE - INTERVIEW
Focused long-term returns
Leandro Gastaldi, Portfolio Manager at Blue Quadrant Capital Management,
outlines the firm’s Macrovalue approach – combining macro themes
with valuation to generate uncorrelated returns.
How would you describe your investment
philosophy as it pertains to managing
hedge funds?
Our core investment philosophy can be
described as “Macrovalue”, which combines
traditional valuation with macroeconomic or
industry thematic analysis. This approach allows
us to identify companies that are not only
undervalued, but also stand to benefit from an
expected favourable shift in macroeconomic or
industry fundamentals. These long trades are
supplemented with CTA-like positions as well
as an equity short book and select event-driven
opportunities that combine to generate a return
profile uncorrelated with traditional equity
benchmarks or long-only equity funds.
What process do you follow to decide
what instruments you will invest in?
Suitable investment opportunities are identified
by screening for companies that trade below our
estimate of intrinsic value, which is based on our
assessment of fair median value over a complete
economic or industry cycle.
Macroeconomic and industry trends are
evaluated to estimate the likely timeframe
within which these companies may re-rate to fair
value. Qualitative factors, including the quality
of the company's management team, are also
considered when determining a suitable discount
rate for the given level of risk.
Our macroeconomic and industry research
sometimes leads to the development of a
thematic thesis. We then look for undervalued
equities to express this theme. Value traps are
avoided by ensuring that the alignment in
the macroeconomic, industry and company
fundamentals favour a re-rating for selected
equities, sooner rather than later.
What do you see as your competitive
advantage?
Our relatively small size allows us to take
meaningful positions in small caps without facing
significant liquidity constraints. We also believe
our investment philosophy and style is fairly
unique, allowing us to generate uncorrelated
returns and thus offering investors useful
portfolio diversification.
How do you manage risk in your hedge
fund(s)?
We consider risk as the permanent loss of
capital. Reasonable short-term volatility is
part of normal market movements and part of
what is required to achieve long-term real
returns. In this regard, we typically target a VaR
of between 1x and 2x the VaR of the underlying
benchmark. Our value discipline provides a
margin of safety in terms of preventing or
minimising a permanent loss of capital.
What are some of the biggest risks you see
in the current market environment?
The unpredictable political landscape is
making it difficult for companies to make longterm
business decisions, which may adversely
affect growth.
What has been your biggest mistake in
managing your hedge fund(s) and what
was the impact?
Selling or reducing exposure to successful
investments too early.
How do you see the future of the hedge
fund industry?
We are positive. Given the rise of passive
investment strategies, there is significant value
in having access to uncorrelated “satellite”
strategies to complement an overall portfolio
and provide risk-reducing diversification.
What are your strategies for hedging
against market downturns?
We do not specifically hedge or try to anticipate
market downturns, given that the fund is
not a market neutral fund. However, our
investment approach ensures that over time our
return profile is likely to be uncorrelated with
benchmark equity indices and most long-only
equity funds.
How do you measure your investment
performance?
We target an absolute return over a period of
time, usually two to three years. The absolute
return is based on inflation plus a targeted
real return.
Leandro Gastaldi,
Portfolio Manager,
Blue Quadrant
Capital Management
BIOGRAPHY
Leandro is the portfolio manager
of the Blue Quadrant Capital
Growth Prescient RI Hedge
Fund, Blue Quadrant Worldwide
Flexible Prescient Fund and Blue
Quadrant USD Capital Growth
Fund. He has extensive industry
experience, having worked as a
research analyst and portfolio
manager. He joined Anglorand
Securities in 2006 and managed
the Anglorand Growth Fund
between 2007 and 2009, before
founding Blue Quadrant Capital
Management in 2010. Leandro
holds a BCom (Honours) from
the University of Cape Town and
is a CFA charterholder.
Blue Quadrant Capital Management (Pty) Ltd (Reg Number: 2009/018608/07) is an authorised financial services provider with a Cat IIA Licence. FSP Number: 42165.
27

2025 HEDGE FUND GUIDE - PROFILE
Corion Capital
Corion was founded in 2001,
previously a division of Brait Ltd.
As one of the pioneers of the
South African hedge fund industry,
Corion’s flagship fund, Corion Absolute FR,
was launched in 2001 and continues to
deliver market-leading risk-adjusted returns,
nearly 25 years later. In 2012, David Bacher
led a management buyout, rebranding
the business to Corion Capital. Everything
we do at Corion is driven by simplicity,
agility and engagement. We continually
challenge the status quo with innovative
asset management strategies as well as progressive
reporting and client engagement.
The people of Corion
The management team are deeply
experienced and highly qualified with senior
members of the investment team having
cut their teeth through the genesis of the
South African hedge fund landscape. Our
core focus on quantitative analysis helps us
stay at the forefront of developing systems
and analysis in a world where technology
is driving efficiencies and cost reduction.
The team has been built with an extensive
range of skill sets that contribute to diverse
ways of thinking when creating investment
solutions.
All in the philosophy
We design investment strategies based on
the following core investment beliefs:
FUND PERFORMANCE
SINCE INCEPTION
• Investors are rewarded for taking risk over
the long term. While alpha can be earned
in the short term by tactical positioning,
the core of any portfolio must be an asset
allocation that seeks to take advantage of
long-term market tendencies.
• Agility is a cornerstone of risk management
and the achievement of alpha is
the ability to reposition portfolios quickly,
cost-effectively and within agreed-upon
risk parameters.
• For us, valuation remains the most reliable
indicator of market cycles and we seek
opportunities to buy into cycles when it
makes sense to do so, even if it may take
time for the position to pay off.
• Diversification is paramount when
constructing robust investment
strategies. In order to take advantage
of the risk premium associated with the
different asset classes, having as many
sources of return, and thus as high a
degree of diversification across asset
classes, territories and jurisdictions,
different strategies (including investment
factors) and styles, will stand a portfolio in
good stead over time.
• Costs must be managed against the
return profile or risk mitigation benefit
any investment represents.
The process
In our approach to multi-managed
investment portfolios, we are deeply aware
of the inefficiencies it produces. This is why
we have developed mechanisms to enable
us to restore balance to a portfolio quickly
and cost-efficiently, without having to make
ponderous and slow manager changes.
Ballast is our risk management function.
We provide it at no additional cost and
ensure that we avoid conflicts of interest in
that there is no incentive to hold a larger or
smaller portion of the portfolio as Ballast.
We have numerous practical examples of
having effectively employed the Ballast
methodology in our track record since we
first implemented Ballast into our portfolios.
Products on offer
We have three retail investor hedge funds
available to clients: Corion Absolute FR RIHF,
Corion Multi-Strategy FR RIHF and Corion
Prosperitas FR RIHF.
Depending on the investment objectives
and risk tolerances of a client, there are
often compelling reasons why a diversified
hedge fund should be included. Hedge
funds have proven outperformance with
reduced volatility. Our hedge funds have
successfully navigated varying market
cycles, corrections and crashes. They provide
clients with access to a myriad of return
drivers through multiple strategies that are
complementary to traditional strategies and
provide compelling risk-adjusted returns.
Corion is the single-entry point to diverse
strategies, asset classes and uncorrelated
return profiles and strategically reduces
portfolio risk while unlocking profitable
opportunities typically out of reach to most
investors.
Perspective on performance
With a long-standing track record, all three
hedge funds have delivered exceptional
returns. They have consistently provided
solid risk-adjusted returns, being able
to not only participate in the upside but
prioritising the protection of capital during
market downturns.
28
10.0% 7.1% 12.0% 9.5% 11.7% 10.8%
NOV 2001 APR 2018 JUN 2013
CORION ABSOLUTE
FR RHF
Outperform Cash
CORION MULTI-
STRATEGY FR RHF
Outperform Composite
of Equities and Cash
CORION
PROSPERITAS FR RHF
Outperform Equities
*Since Inception *Since return Inception as return at end as at June end June 2025. Returns are annualised are annualised for periods longer for periods than one year. longer Annualised than return one is year. the weighted Annualised average compound return is the weighted
growth rate over the period measured. All returns in ZAR and net of fees. Data sources: Hedge Fund data from FundRock. Click here to view the latest MDD”S
average compound growth rate over the period measured. All returns in ZAR and net of fees. Data sources: Hedge Fund data from
and full disclosures.
FundRock. Click here to view the latest MDD”S and full disclosures.
Contact information:
• Nicole Keenan
• Telephone: 021 831 5400 / 063 255 8977
• Email: clientservices@corion.co.za
• Website: www.corion.co.za

2025 HEDGE FUND GUIDE - INTERVIEW
Diversification is the only
free lunch
Corion Capital is a pioneer of the South African hedge fund
industry whose funds have been able to comfortably outperform
their benchmarks since inception and with lower volatility.
How would you describe your investment
philosophy as it pertains to managing hedge funds?
Our investment philosophy is consistent throughout
all of our funds and does not differ when it comes
to hedge funds. We design investment strategies
based on the core investment beliefs of risk premia
(being rewarded for taking risk over the long term),
being agile, valuation-driven to seek opportunities
in market cycles, diversification and ensuring that
costs must be managed effectively.
What do you see as your competitive advantage?
Corion serves as a single-entry point to diverse
strategies and asset classes which combine
uncorrelated return profiles. We strategically
reduce portfolio risk while unlocking profitable
opportunities typically out of reach to most investors.
Our long history in the industry has afforded us entry
into strategies and funds that are now closed to
the general retail investor base, as well as our
critical mass securing access to opportunities in
new startup funds with favourable fee terms. Our
experienced investment professionals have been in
the markets for 20+ years and therefore involved in
the markets over various cycles and not just in one
long bull market. Corion is in the “Goldilocks stage” – not
too big and not too small, resulting in dynamic systems,
analysis and execution.
How do you manage risk in your hedge fund(s)?
Here is a breakdown of how we manage risk in our hedge
fund(s).
• Top-down basis which starts with the portfolio
construction – diversification is the only free lunch.
• Detailed due diligence and analysis of underlying fund
managers by manager research team – decreases
operational and manager risk
• Detailed quantitative work utilising optimisation to
blend different risk and return payoffs to obtain the
greatest probability of achieving the stated return vs
risk profile – Corion has three very specific hedge funds
targeting three different risk and return profiles – Low,
Moderate and High
• Detailed look through analysis and monitoring utilising
the services of third-party risk specialists
• We have developed an internal risk management
Corion Capital (Pty) Ltd. is An Authorised FSP (44523). https://www.corion.co.za/hedge-funds/
function called Ballast which allows us to rebalance
portfolios swiftly and cost-effectively, avoiding the
delays and expenses at no additional cost.
How do you see the future of the hedge
fund industry?
These are exciting times for the hedge space.
Managers have access to a complete set of
investment tools, many of which aren’t available
to the traditional long-only investment manager –
such as shorting and leverage. The SA hedge fund
industry is fortunate to have a base of high-quality,
exceptionally driven investment professionals,
while the investment industry has started to
embrace the industry and has recognised that
hedge funds, when included correctly in one’s
investment portfolio, can add substantial benefits.
How do you generate investment ideas?
As in life, there's no getting around the fact that it
all comes down to hard work. Hard work includes an
extraordinary amount of reading, debating, listening
and detailed analysis of markets. Corion has put in
place dynamic, diversified investment teams that
focus on different areas of the market and then
meet regularly to discuss investment ideas. Once
our top-down approach has been framed, we
then employ managers with specific skill sets to
deliver on our macro view.
What are your strategies for hedging against
market downturns?
Diversification of uncorrelated strategies and assets is
key, while utilisation of derivatives for hedging purposes
and being agile in the implementation and management
of such strategies is also important. Investing in assets
with asymmetric payoffs is another strategy we follow.
What is your track record, and how have your hedge
funds performed in different market cycles?
Our longest-running hedge fund is coming up to a
24-year track record which means there have been
various market cycles, corrections and crashes that
have been experienced. Our funds have been able
to comfortably outperform their benchmarks since
inception and with lower volatility.
Garreth Montano, CEO,
Corion Capital
BIOGRAPHY
Garreth began his
career as a private client
portfolio manager
before embarking on his
investment banking career
with Investec. He attained
vast local and international
experience in equity
derivatives. Garreth has
experience in managing
hedge funds and financial
services businesses and
has worked with Corion
since 2012.
29

2025 HEDGE FUND GUIDE - PROFILE
Edify Fund Managers
Edify was founded by Christiaan Janse
van Rensburg in 2020. Christiaan saw
an opportunity to offer alternative
multi-management to the retail
sector after a career of building alternative
investment solutions for institutional clients.
Edify, located in Paarl, is a 100% ownermanaged
discretionary fund manager (DFM)
with a client base of 20 financial advisors and
an AUM of R1.5-billion.
Meet the team
Christiaan Janse van Rensburg, Adam Bulkin
and Chelsea Heath form the investment
team at Edify. As founder, Christiaan has
15 years of investment experience. He has
previously held positions such as Investment
Manager and Specialist, Investment Analyst
and Portfolio Manager at various top-rated
investment firms. Alongside him, Adam
Bulkin, the former Head of Global Products
at Alexander Forbes Investments, has 20
years of experience while Chelsea Heath
has one year of investment experience and
holds a Bachelor’s degree in investments.
She is currently in the process of completing
her Honours and CFA designation.
Investment philosophy
Central to our philosophy at Edify is a
steadfast commitment to a structured and
meticulously defined investment process.
We uphold the belief that a methodical and
disciplined approach to investing should
yield outcomes that are not only consistent
but also replicable over time.
At Edify, our portfolio construction
methodology has evolved to incorporate
a sophisticated building block approach,
enabling us to deliver more resilient and
adaptable investment solutions. This
approach begins with a carefully designed
strategic asset allocation framework,
meticulously tailored to meet the client’s
long-term investment objectives.
The building block approach organises
the portfolio into distinct asset categories,
each serving as a foundational element of
the investment strategy. These include the
SA Equity Block, Income Block, Offshore
Block, as well as a Defensive Hedge Fund
30
and Growth Hedge Fund Block, with each
block comprised of funds specifically aligned
to its respective asset class.
Hedge funds
We can evidence empirically that the
addition of hedge funds as an asset class
to a balanced portfolio of traditional assets
has increased returns and at the same time
reduced volatility and drawdown risk. Hedge
funds exploit different drivers of return
which are not necessarily correlated with
broad market movements. This is because
hedge funds are absolute return focused.
They attempt to deliver positive returns in
all market conditions.
Process
We want to develop a deep knowledge of
a manager’s strategy, risk management
and approach. We need to understand
the way in which a manager generates
returns and how repeatable and reliable
that methodology is. Ideally, we want
to identify highly skilled managers who
are able to generate that asymmetry of
returns (capturing more of the upside than
the downside of a given market) that we
expect from hedge funds. Ideally, we want
to invest in managers whose interests are
aligned with their clients and who have
integrity, track records and robust risk
management. This analysis uses qualitative
and quantitative inputs. We seek to blend
managers that are diversified in terms of
strategy, asset class risk and directional
bias. The result is relatively low correlation
among funds. Ultimately, we are attempting
to achieve a blend which improves the
efficient frontier and risk-adjusted returns.
Fortunately, in South Africa, the hedge fund
industry is fairly small, and our experience
in the market means that we have developed
a familiarity and knowledge of most of the
credible managers.
Edify is a boutique that offers high-touch
service to clients. Advisors have a direct line
to the investment team. We are problem
solvers and are always willing to assist
in finding business solutions that make
sense to advisors. Additionally, Edify hosts
various initiatives that aim to educate and
provide access to the underlying hedge fund
managers utilised in the solutions.
Products and performance
Edify offers two hedge fund specific
solutions:
• Edify Defensive Hedge is a cautious
solution with a benchmark of CPI +3%.
The fund is well suited for shorter-term
investment goals and is also well suited
to be used in living annuities.
• Edify Growth Hedge is a moderate
aggressive risk with a benchmark of CPI
+5%. The fund is well suited for Reg28
(where the advisor can allocate 10% to
the solutions and be within regulation
limits), discretionary investments and
living annuities.
We offer:
• Bespoke and white-labelled solutions to
both cat I and cat II advisors.
• Model portfolios across the risk spectrum,
from strategic income solutions to
long-term growth flexible mandates,
Reg28, TFSA solutions and everything in
between.
Performance
Edify Defensive Hedge
Target CPI +3%, delivered CPI +7.5% over
5 years with no negative return over any
12-month period.
• Annualised Performance (3yr): 11.9%
• Annualised Performance (5yr): 13.0%
• Standard deviation (5yr): 3.21%
• % Positive months: 84%
Edify Growth Hedge
Target CPI +5%, delivered CPI +10% over
5 years.
• Annualised Performance (3yr): 16.0%
• Annualised Performance (5yr): 19.5%
• Standard deviation (5yr): 7.87%
• % Positive months: 71%
Contact information:
• Chelsea Heath
• Telephone: 087 265 0072
• Email: info@edifyinvest.co.za
• Website: www.edifyinvest.co.za

2025 HEDGE FUND GUIDE - INTERVIEW
Strategy, risk management
and approach
Edify Fund Managers is the expert when identifying credible managers
in the hedge fund game.
What is the value of hedge funds as part of a
broader balanced and diversified portfolio?
We can evidence empirically that the addition
of hedge funds as an asset class to a balanced
portfolio of traditional assets has increased
returns and at the same time reduced volatility
and drawdown risk.
Hedge funds exploit different drivers of
return which are not necessarily correlated
with broad market movements. This is because
hedge funds are absolute return minded. They
attempt to deliver positive returns in all market
conditions. Even if they may not capture all
of the upside in a bull market, they will also
experience significantly less of the downside in
a bear market.
Hedge funds also tend to do well in volatile
markets, where skilled managers can use their
flexibility and nimbleness to make use of the
opportunities that present themselves in
difficult times.
In addition, hedge fund returns are generally
not driven by directional markets or market
betas. This means that the returns of hedge
funds are relatively uncorrelated to the broader
market and to other hedge funds.
This all results in great diversification
benefits when combining hedge funds with
more traditional, long-only assets.
What is the role of a diversified hedge fund
portfolio and why utilise a wrap fund or
model portfolio?
Hedge funds are not only uncorrelated to longonly
assets, but each hedge fund itself is unique
and uncorrelated to others. Therefore, there is
further diversification benefit to thoughtfully
blending a portfolio of hedge funds, rather than
using a single hedge fund.
Furthermore, there is always risk in investing
in only one fund or strategy, no matter which
asset class one invests in. It is therefore always
sensible to spread this risk among a number of
funds, and the same goes for hedge funds.
Hedge funds are complex and idiosyncratic
in nature. In any one strategy category, the
risk profile of particular funds can vary greatly.
Therefore, in evaluating the risk and expected
behaviour of hedge funds, the investor needs to
have specialist, deep knowledge and experience
of the asset class to determine which specific
hedge funds to select and how to blend them.
A model portfolio is an efficient and relatively
safer way for an advisor to access hedge funds,
so that expert knowledge and experience can
assist in creating an appropriate portfolio of
hedge funds and provide a single access point
to make a hedge fund allocation. Within a model
portfolio, dynamic and active monitoring and
management of the portfolio can take place
while removing regulatory risk from the advisor.
In addition, the model hedge fund portfolio
may be implemented in a complementary
manner alongside the traditional, long-only
component of an investment portfolio, on the
same investment platform and within the same
framework as the existing portfolio.
What is your process and how do you
construct a portfolio?
We want to develop a deep knowledge of a
manager’s strategy, risk management and
approach. We need to understand the way in
which a manager generates returns and how
repeatable and reliable that methodology
is. Ideally, we want to identify highly skilled
managers who are able to generate that
asymmetry of returns (capturing more of the
upside than the downside of a given market)
that we expect from hedge funds. Ideally,
we want to invest in managers whose interests
are aligned with their clients and who have
high integrity, long track records and robust
risk management.
This analysis uses qualitative and quantitative
inputs. Fortunately, in South Africa, the hedge
fund industry is fairly small, and our long
experience in the market means that we have
developed a familiarity and knowledge of most
of the credible managers.
Adam Bulkin, Portfolio Manager,
Edify Fund Managers
BIOGRAPHY
Adam has 20 years of investment
experience. Adam has
a BA(Hons)LLB degree and is
an admitted attorney of the
High Court. He also holds the
CAIA designation. Adam was
previously Head of Global
Products at Alexander Forbes
Investments and initiated
the alternatives investment
programme. He later moved
to Sanlam Multi-Manager
International, where he was
Head of Manager Research
and Head of Global Portfolios,
as well as a member of the
Asset Allocation Committee
and the Alternatives Portfolio
Management Committee.
31

2025 HEDGE FUND GUIDE - PROFILE
Laurium Capital
Laurium Capital is an employeeowned
boutique asset manager,
offering several hedge and long-only
funds to South African and global
investors. The company was founded
in 2008 by Murray Winckler and Gavin
Vorwerg with the launch of the Laurium
Long Short Prescient RI Hedge Fund and
has grown to over R66-billion in assets
under management.
As the firm’s capabilities have grown,
Laurium has expanded its product range
and now offers 14 funds across the risk
spectrum from low-risk income funds,
through to low and high equity asset
allocation funds, as well as flexible funds
and hedge funds.
Laurium’s asset
size and lack of
bureaucracy enables it
to act immediately on
market information and
implement ideas quickly
Investment philosophy
As a boutique manager, Laurium
can capitalise and generate alpha
through stock selection and trading
opportunities. The team believes that
strong fundamental analysis with a
valuation bias, complemented by eventdriven
situations and trading should
drive superior performance over
time. Laurium’s asset size and lack of
bureaucracy enables it to act immediately
on market information and implement
ideas quickly. The investment team
meets every morning to discuss stocks
and views of the market and are
constantly alert to special opportunities
that present themselves from time to
time in markets and look to capitalise on
these opportunities.
What Laurium offers
Laurium has been managing hedge
funds since 2008 and has the following
hedge funds:
• Laurium Market Neutral RI Hedge Fund
• Laurium Long Short Prescient RI Hedge
Fund
• Laurium Aggressive Long Short
Prescient QI Hedge Fund
• Laurium Enhanced Growth Hedge Fund
(available to SA investors via a ZAR
feeder fund)
The Laurium Aggressive Long Short
Prescient QI Hedge Fund was launched
in 2013 with an annual performance
objective of CPI+10, which it has
achieved, in addition to significantly
outperforming the South African equity
market (Capped SWIX) with similar
volatility. This fund is available only
to qualified investors, has a minimum
investment amount of R1-million and
trades monthly. The Laurium Enhanced
Growth Prescient RI Hedge Feeder Fund
was launched on 1 March 2024 and
largely follows the same mandate as
the Aggressive Long Short QIHF but is
structured so that retail investors are
now able to access this strategy for a
minimum investment amount of R20 000
and with the enhanced benefit of daily
liquidity. The mandate differs slightly
from Aggressive Long Short, in that the
new fund may have an allocation to select
international equities.
The team in charge
Laurium’s hedge funds are managed by
co-founders Gavin Vorwerg and Murray
Winckler, with Matthew Pouncett being
the assistant portfolio manager. They are
supported by the remainder of Laurium’s
21-strong investment team. Before starting
Laurium Capital, Murray was CEO of
Deutsche Bank South Africa. Prior to his
role as CEO, Murray held various positions
at Deutsche SA including Head of Global
Markets (Debt and Equity) and Head of
Research. During his tenure, Deutsche
Bank held top ratings across all areas.
Gavin Vorwerg worked for Deutsche
Bank (London) and was responsible
for strategic equity structuring in Africa
(including SA), Middle East and Central
Europe before returning to South Africa
to start Laurium Capital with Murray in
2008. Prior to moving to London, Gavin
worked for Deutsche Securities SA and
was responsible for equity structuring and
derivatives in the equities business and
was a member of the equities executive
committee. Before focusing on structuring,
Gavin was an equity analyst, rated number
1 or 2 in Financial Mail in several sectors
each year from 2000, thus contributing to
the number 1 rating of the overall team.
We have a strong
understanding of
business fundamentals
and market cycles
as well as proven
valuation skills
Laurium has a 13-strong inhouse
operations team responsible for oversight
and reconciliations with outsourced
administrators, as well as other operational
activities. In addition, there is a team of
10 highly qualified Business Development
and Client Service personnel who
strive to provide prompt, superior service
to the firm’s broad range of clients in
South Africa and offshore (direct, retail
and institutional).
Contact information:
• Kim Zietsman
• Telephone: 011 263 7715
• Email: kim.zietsman@lauriumcapital.com
• Website: www.lauriumcapital.com
32
Laurium Capital (Pty) Ltd is an authorised financial services provider (FSP 34142).

2025 HEDGE FUND GUIDE - INTERVIEW
Disciplined hedging practices
Kim Zietsman, Head of Business Development and Marketing at
Laurium Capital, provides insights into how they generate exceptional
returns for their clients.
How would you describe your investment
philosophy as it pertains to managing
hedge funds?
We have a strong understanding of business
fundamentals and market cycles as well as
proven valuation skills. Using these skills as
a smaller manager within a narrow and
shrinking stock universe allows us to generate
alpha through active stock selection beyond
our larger peers. We are further able to
capitalise on shorter-term value dislocation
opportunities. Strong fundamental analysis,
a high-quality core of stocks selected with
a valuation bias complemented by eventdriven
strategies should continue to drive
superior performance over time.
What do you see as your
competitive advantage?
We are a well-resourced team, yet we remain
nimble, not weighed down by large AUM or
corporate structures. This allows for quick
decision-making and provides an environment
where active management can thrive.
Laurium is one of the only asset management
companies in South Africa founded and run
by ex-sell-side individuals. We believe the
drive and investment banking discipline in
the way we approach investments is unique.
The firm employs individuals who have a
rich set of connections in both South Africa
and Africa, which we believe in leveraging.
What process do you follow to decide what
instruments you will invest in?
Investment selection is driven by the investment
objective of the fund. We strive to minimise
risk through disciplined hedging practices
and to maintain high levels of liquidity, low
concentration risk and low correlation to the
equity market.
As part of our research process, we determine
fair values for all equities and investments that
are under our coverage and in our portfolios.
The risk related to these specific positions is
then qualitatively and quantitatively assessed
before their inclusion in the portfolio.
Considerations would include elements such
as the range of possible fair values for the
instrument in question, levels of operating
and financial leverage of the company,
the liquidity profile of the share, etc. The
aim is to include positions that generate
the best risk-adjusted returns in line with
the fund’s objective.
In addition, the portfolio managers will
assess how the instrument’s inclusion will
impact overall portfolio risk. As part of our
investment risk management philosophy,
we aim to spread our gross and net exposure
over sectors and factors, and not to take
significant directional bets on this basis.
This does not mean we never have strategic
tilts to certain sectors or factors but that
these tilts are controlled and assessed relative
to the risk they carry.
How do you manage risk in your
hedge fund(s)?
Given the broad range of tools available to
hedge fund managers, risk can be managed
in many ways. Hedge funds use leverage,
gross exposure and net exposure as key tools
to manage both risk and return. By actively
monitoring and adjusting both gross and
net exposures, managers can dial up or dial
down risk, depending on the mandate and
investment objectives.
Short positions are used both as a riskmitigation
tool but also in alpha generation.
Individual stock short positions are used to
both mitigate factor risks emanating from
the long book as well as to generate alpha,
either as a pair against a long position or
through the creation of a “rump” trade by
shorting out a particular part of a company
with listed underlying components. Outright
shorts are used when we believe that a company
is trading significantly higher than our
assessment of its intrinsic value.
Risk is also managed by appropriate sizing
and diversification of long and short books
and continuously managing liquidity risk.
What is your track record?
Laurium has been managing hedge funds
for over 16 years, generating exceptional risk
adjusted returns for our clients, net of fees.
Kim Zietsman, Head of Business
Development and Marketing,
Laurium Capital
BIOGRAPHY
Kim joined Laurium Capital in
September 2013 and is Head of
SA Business Development and
Marketing. Before that, Kim was
CEO of StoneHouse Capital, a
subsidiary of the Liberty Group.
She spent 9 years at STANLIB,
where she held a variety of
positions including Product
Development, Head of Offshore
products and Head of the Unit
Trust Company. Kim started her
financial career at RMB Asset
Management in 1998. Kim is a
CFA Charterholder.
33

Matrix Fund Managers
Matrix Fund Managers is a Cape
Town-based, owner-managed
investment firm managing client
investments of nearly R35-billion.
Founded in 2006 and rebranded in 2012, Matrix
has established itself as one of South Africa’s
most experienced and respected hedge fund
managers. The ownership structure creates a
culture of long-term thinking and meaningful
alignment with client outcomes.
Matrix serves a broad base of institutional
and private clients, both locally and globally.
Matrix currently manages a significant
and growing pool of assets across both
traditional and alternative strategies, with
particular strength in fixed income hedge
fund management.
Experience you can count on
At Matrix, investment management is in
the hands of seasoned professionals. Our
streamlined structure enables agile, decisive
execution within a clearly defined riskmanagement
framework. Our leadership
brings stability and vision.
• Lourens Pretorius heads the Fixed
Income team
• Bruce Mommsen leads the Equity
and Property team
Matrix’s 15 investment professionals bring
more than 250 years of collective experience
to the table, balancing deep institutional
knowledge with fresh thinking from emerging
talent, where we view the development of our
next-generation investment staff as key to the
sustainability of Matrix.
Absolute return, absolute focus
Matrix was a hedge fund manager first and
that DNA still drives everything we do. Being
active and pragmatic investors, we focus on
liquid markets across our product offering,
ensuring that we can adjust our holdings
when circumstances dictate. Our absolute
return philosophy prioritises capital
preservation and returns that are consistent
with our mandated objectives.
The Matrix fixed income hedge funds
focus on relative value trading strategies
concentrated on the shorter end of the yield
curve. We hold the view that many central
banks – the South African Reserve Bank (SARB)
included – implement credible monetary
policy frameworks that are trend-like in
nature. Moreover, we believe that market
pricing tends to be an unreliable indicator
of future monetary policy decisions, creating
34
2025 HEDGE FUND GUIDE - PROFILE
Figure 1: Net Performance Matrix SCI Fixed Income RHF since inception (Class B1), (cumulative returns)
Source: Matrix SCI Fixed Income Retail Hedge Fund MDD, 30 April 2025. Note that past performance is not necessarily a guide to future
performance and subject to disclaimers in link opposite
investment opportunities.
Discipline drives alpha
Our hedge fund process is grounded in
rigorous macroeconomic analysis, supported
by proprietary econometric and fair value
modelling. The use of interest rate
derivatives significantly broadens our
opportunity set, with global market access
facilitated through our prime brokerage
relationships. Over time, we have established
ourselves as a meaningful and respected
participant in this specialised market.
All investment opportunities are evaluated
within a clearly defined risk budget and
mandate framework, ensuring capital is
allocated where it delivers the greatest value.
We place strong emphasis on maintaining
high levels of liquidity and minimising credit
risk at all times.
In terms of client engagement, we work
closely with our professional investors to
understand their objectives and ensure
efficient, transparent execution. Our clients can
expect responsiveness, clear communication,
and a collaborative approach at every stage.
Hedge fund solutions
Matrix offers two CISCA-regulated retail hedge
funds (RHFs), complemented by a range of
traditional unit trusts:
Table 1: Performance of the Matrix SCI Fixed Income RHF (Class B1)
• Matrix SCI Fixed Income RHF: Focused
on institutional investors.
• Amplify SCI Income Plus RHF in
partnership with Amplify Investment
Partners: Retail ready and available on
most LISPs.
Proven performance
Over time, the Matrix hedge funds have
consistently delivered strong absolute returns
with low correlation to traditional asset
classes. Our Matrix SCI Fixed Income RHF, for
example, has outperformed cash, bonds (ALBI)
and equities (ALSI) over the 16.5 years since
inception in October 2008, while exhibiting
significantly lower volatility than equities
(note that the fund converted to a regulated
CIS hedge fund on 1 September 2016).
When blended into a portfolio alongside
traditional fixed income and equity assets,
a Matrix hedge fund could have provided
significant diversification benefits to portfolio
risk and return profiles, a compelling case
for financial advisors seeking optimal client
outcomes.
Contact information:
• Jean-Pierre Matthews
• Telephone: 021 673 7800
• Email: MatrixBDTeam@matrixfm.co.za
• Website: www.matrixfundmanagers.co.za

2025 HEDGE FUND GUIDE - INTERVIEW
A hedge fund legend
Jean-Pierre Matthews or JP – as he is widely known – has been a prominent
figure in the hedge fund industry for decades.
What did you study, and how did you enter
the investment industry?
I hold a BSc in Actuarial Science and began
my career in employee benefit consulting.
There was a large component of asset-liability
modelling involved in the work and it was here,
on the asset side, that I became fascinated by
financial markets. At the time, my youth made
the fast-paced and mysterious nature of that
environment especially compelling.
In 1996, I was lucky enough to find a job on
the old bond floor – yes, those were the crazy
days when government bonds still traded on
open outcry, but soon after transitioned to
screen trading. My move to the industry also
came with a starting salary of ZERO, so it was a
big leap of faith for me!
I began as a fixed income analyst and later
progressed to proprietary trading. I loved my
job: combining quantitative techniques with
qualitative market dynamics to predict future
outcomes was fun, intellectually stimulating and
personally rewarding.
Over time, I was involved in establishing
several non-traditional businesses that included
derivative structured products, derivative
securities trading and hedge funds. Several of
my colleagues at Matrix today were also part of
my journey from day one and I am thankful for
their friendship and mentorship.
In pursuit of deepening my technical
knowledge and professional standing, I earned
the CFA Charter in the early 2000s. Later, as my
role evolved to include business and product
development within financial services, I
completed a Postgraduate Diploma in Financial
Planning and obtained the CFP designation. This
allows me to bring a well-rounded perspective to
investment strategy and product design.
How does your actuarial background
influence the way you approach
financial markets?
Actuarial science revolves much around valuing
future cash flows that are often contingent on
uncertain events such as life span, withdrawals
or claims experience. Actuaries are trained to
view the future as inherently uncertain and
to make decisions that optimise for a range
of potential future outcomes. That kind of
probabilistic thinking about future scenarios is
a practical and valuable approach to financial
markets and investing.
How has the hedge fund industry evolved in
South Africa?
Many of my friends at Matrix and I have been
involved in the SA hedge fund industry since
its infancy. While it may appear to be gaining
quick popularity now, this industry has been
more than two decades in the making. We often
joke that it has taken 25 years to become an
overnight success.
The regulatory framework introduced by the
Financial Sector Conduct Authority (FSCA) has
played a pivotal role in strengthening investor
confidence, particularly among private clients.
Previously, hedge funds were largely the domain
of institutional investors, but we’re now seeing
growing interest from the retail market.
What still excites you about going to work
every day?
Alpha generation remains the cornerstone
of hedge fund investing, but it’s important
to recognise that true alpha is rare and very
few people possess the skill, insight and
temperament to perform consistently. These
individuals are often unconventional and highly
talented, and I’m energised by them and the
diverse perspectives they bring to markets and
life in general.
At Matrix, our hedge funds have nearly two
decades of proven results, built on discipline, a
differentiated approach and a growing talent
pool of old campaigners and enthusiastic
youngsters. It is awesome to be part of a team
like that.
Jean-Pierre Matthews, Head of
Product, Matrix Fund Managers
BIOGRAPHY
Jean-Pierre joined Matrix in 2019
as Head of Product, responsible
for the development and
distribution of the Matrix product
range. He is also a key individual,
representative and member of
Matrix’s Investment Committee.
JP started his financial career in
1996 as a fixed income analyst
and trader. A long-standing
proponent of the SA hedge fund
industry, JP has been involved
in the establishment of various
alternative asset management and
securities trading businesses and
was a portfolio manager and head
of business at a large institutional
alternative asset manager before
joining Matrix. He has a degree in
actuarial science and is a CFP and
CFA Charterholder.
Also available at https://bit.ly/matrixDisclaimer
Sanlam Collective Investments (RF) (Pty) Ltd), a registered and approved Manager in Collective Investment Schemes in Securities. Collective investment schemes are generally medium- to long-term investments. Past
performance is not necessarily a guide to future performance, and that the value of investments / units / unit trusts may go down as well as up. A schedule of fees and charges and maximum commissions is available
from the Manager on request. Collective investments are traded at ruling prices and can engage in borrowing and scrip lending. The Manager does not provide any guarantee either with respect to the capital or the
return of a portfolio.
Performance is based on NAV-to-NAV calculations with income reinvestments done on the ex-div date. Performance is calculated for the portfolio and the individual investor performance may differ as a result of initial
fees, actual investment date, date of reinvestment and dividend withholding tax. While CIS in hedge funds differ from CIS in securities (long-only portfolios) the two may appear similar, as both are structured in the same
way and are subject to the same regulatory requirements. The ability of a portfolio to repurchase is dependent upon the liquidity of the securities and cash of the portfolio. A manager may, in exceptional circumstances,
suspend repurchases for a period, subject to regulatory approval, to await liquidity and the manager must keep the investors informed about these circumstances. Further risks associated with hedge funds include:
investment strategies may be inherently risky; leverage usually means higher volatility; short-selling can lead to significant losses; unlisted instruments might be valued incorrectly; fixed income instruments may be
low-grade; exchange rates could turn against the fund; other complex investments might be misunderstood; the client may be caught in a liquidity squeeze; the prime broker or custodian may default; regulations could
change; past performance might be theoretical; or the manager may be conflicted.
35

2025 HEDGE FUND GUIDE - FOCUS
Investing’s holy grail?
Investors are often confronted with a range of considerations – how to access
hedge funds, which strategies to choose and whether hedge funds are
appropriate for their portfolios. By Jean-Pierre Matthews of Matrix Fund Managers
We will look at the potential benefits of including
hedge funds as part of a portfolio solution. However,
when it comes to the practical steps – selecting
specific hedge funds and determining how to invest –
it may be prudent to speak to an accredited advisor or access hedge
fund exposure through a curated basket of funds offered by a
Discretionary Fund Manager (DFM).
Hedge funds are less risky than you think
The hedge fund universe is broad and not homogeneous in terms
of risk or return. Funds vary based on the underlying assets in which
they invest and the strategies they deploy. Even within the same
category, hedge funds can demonstrate significantly different risk and
return characteristics.
This contrasts with the more linear risk spectrum typically seen in
the unit trust industry, ranging from low-risk money market funds to
higher-risk equity funds. In that space, risk tends to increase predictably
as one moves along the spectrum (Figure 1).
Given the variety of hedge fund strategies and idiosyncrasies and
risk dynamics, the CISCA regulator has stipulated a range of strict risk
limits that approved Retail Investor Hedge Funds need to adhere to.
Figure 1: Risk categories of long-only vs hedge funds
diverse sources of return beyond traditional long-only strategies.
One approach involves capitalising on relative price movements
between two stocks, like long/short equity funds. Other funds
may provide investors with access to specialist markets, such
as interest rate derivatives, that may not typically form part of
traditional portfolios.
• Uncorrelated returns provide diversification benefits: Hedge
funds offer the unique advantage of generating positive returns,
regardless of general market conditions. Due to their diverse
nature, hedge funds also tend to perform differently from each
other too. They therefore combine very well with traditional
portfolios and other hedge funds to potentially improve an
investor’s total risk-return profile.
Proof of the pudding
By way of example, the Matrix SCI Fixed Income Retail Hedge Fund
(Class B1) has returned cash plus 9% after fees, which is greater
than inflation plus 10%, while maintaining a low correlation of
0.45 to bonds and a mere 0.07 to equities, thereby making it an
excellent diversifier.
Figure 2: Growth of R100 invested in different assets vs
Matrix SCI Fixed Income RHF (Class B1), (cumulative returns)
Investing’s holy grail
We can identify several advantages to including hedge funds in diversified
portfolios, which may essentially result in better risk-adjusted returns:
• Robust regulation: The industry is very well regulated in South
Africa, with hedge fund managers being regulated under the
Financial Advisory and Intermediary Services Act (FAIS) and
hedge funds being regulated under the Collective Investment
Schemes Control Act (CISCA).
• Prudent risk limits: Within CISCA, there are conservative, worldclass
risk limits published in Board Notice 52. This means that the
risks which are deployed in hedge funds, especially retail hedge
funds (RIFs), are not as high as you may think. The regulations
protect investors by limiting potential losses, controlling
leverage and ensuring portfolio diversification. These limits
– such as Value-at-Risk (VaR), exposure caps and liquidity
requirements – help prevent excessive risk-taking and reduce
the likelihood of large drawdowns. They promote transparency,
risk oversight and alignment with expectations.
• Mandate advantages: Hedge funds have the flexibility to pursue
36
Source: Matrix, Bloomberg, Apex, SCI. Performance from 1 October 2008 – 31 March 2025; past
performance is not indicative of future performance and subject to disclaimers in the link below
Table 1: Performance of the Matrix SCI Fixed Income RHF (Class B1)
In summary, hedge funds can play a valuable role in a diversified
portfolio by offering low correlation to traditional assets, reduced
overall volatility and the potential for above-average, risk-adjusted
returns over time.
Disclaimer available at https://bit.ly/matrixDisclaimer

2025 HEDGE FUND GUIDE - PROFILE
The power
in blending
hedge funds
Hedge funds are sophisticated
investment strategies that,
when used effectively, offer
compelling risk adjusted
returns. At MitonOptimal, we are strong
advocates of diversification and we apply
this philosophy rigorously in our hedge
fund approach.
Over the last five years, we have
successfully blended hedge funds to
meet a range of return objectives.
With their broader investment toolkit,
hedge funds and absolute return
strategies can deliver positive returns
(net of fees) regardless of market direction
and generate equity-like returns with
lower volatility than traditional longonly
funds.
However, capturing these benefits
requires more than just access – it takes
deep understanding and expertise.
Our strength lies in our comprehensive
knowledge of the South African hedge fund
landscape. We understand the nuances
between different strategies and managers
and have proven experience in identifying
and combining the top-performing funds
to create well-diversified, high-performing
portfolios for our investors.
Harness the power of hedge funds
in your clients’ portfolios – explore the
MitonOptimal Core ASTUTE Range.
Jacques de Kock, Portfolio Manager,
MitonOptimal
Contact information:
• Telephone: 021 689 3579
• Email: dfmservice@mitonoptimal.com
• Website: www.mitonoptimal.co.za
CORE ASTUTE RANGE
of Model Portfolios
Two expertly blended SA hedge fund solutions:
1
2
MitonOptimal Core ASTUTE Guarded Portfolio
MitonOptimal Core ASTUTE Bold Portfolio
021 6899 35799 dfmmmmseerviiiccee@mmmmiiittooonooopttiiimmmmal.ccooommmm
www.mitonoptimal.co.za
MitonOptimal South Africa (Pty) Ltd, registration no. 2005/032750/07, is an authorised Financial Services Provider (“FSP”) with license no. 28160.

2025 HEDGE FUND GUIDE - INTERVIEW
African Roots.
Global Vision.
Mazi Asset Management is a fundamental
bottom-up asset manager that believes in the
power of diversity and its ability to deliver results.
How would you describe your investment
philosophy as it pertains to managing a
hedge fund(s)?
In the hedge fund we leverage the firm’s
research capability to identify investment
opportunities on both the long and the
short side. Where we differ from the “house
process” is that we are not constrained by
a benchmark, which means our best ideas
are also our biggest positions in the fund,
adjusted for risk and liquidity. Ultimately,
the aim of the fund is to provide equity-like
returns with a lower risk profile by capturing
most of the market upside, while restricting
downside participation.
What process do you follow to decide
what instruments you will invest in?
We continuously search for opportunities,
whether individual instruments or
systematic strategies, which meet or exceed
our return targets, ideally in ways which are
uncorrelated to the balance of our portfolio.
When such an opportunity increases our
expected return or reduces the risk of the
overall portfolio without detracting from
expected returns, that instrument/position
will be added.
In deciding which instruments to invest
in we look to strike a balance between
opportunity for returns and the risks
(liquidity and volatility) of achieving those
returns. If liquidity is high, volatility is
low and expected returns are above our
hurdle rate we are not hesitant to have
a substantial investment, which for us
translates into a 5% to 8% position. This
was the case recently with our investment
in British American Tobacco.
As our business and research capability
has grown, we continuously seek to leverage
the expanded collective knowledge. In late
2020, we established a dedicated team to
do global investments and in 2022 we
added a team that specialises in machine
38
learning techniques. We have been
systematically leveraging off their work as
an additional and differentiated source of
new idea generation.
What do you see as your competitive
advantage?
Mazi’s motto is “Delivery through diversity”
and we absolutely believe in the power of
diversity. We actively seek to recruit people
from different backgrounds with differing
views, qualifications, ideas and approaches
to tackling problems.
As our business and
research capability
has grown, we
continuously seek to
leverage the expanded
collective knowledge
How do you manage risk in your hedge
fund(s)?
We actively manage risk through
instrument/position selection. Beyond
portfolio construction we also actively track
and manage the overall risk of the portfolio
by controlling both gross and net exposure.
On average, our net exposure is in the range
of 75% to 85%, while gross exposure ranges
from 100% to 130%.
What are some of the biggest risks you
see in the current market environment?
We are most concerned about geo- political
uncertainty and the potential impact of
changes to the global economic order.
This poses both a risk and potentially an
opportunity, but it is the uncertainty and
concomitant volatility which has, and we
think will continue, to wreak havoc with
portfolios. The risk of overreaction in both
directions is extreme. Our approach has
been to remain invested, but to favour
lower risk ideas/positions.
What has been your biggest mistake in
managing your hedge fund(s) and what
was the impact?
During the early years of managing hedge
funds we mirrored our long only funds too
closely: ideas, sizing and trading. This led to
a prolonged period of subpar performance,
which we are still clawing back. While
our ideal holding period is very long, we
failed to take advantage of the inherent
nimbleness the hedge fund environment
affords a manager. During the second half
of 2019 we changed our approach and
unshackled the team managing hedge
funds to act independently, still applying
the same philosophy and utilising the same
research output but with an ability to act
faster and size positions relative to the
opportunity. Our performance since then
has been markedly better.
How do you see the future of the hedge
fund industry?
Since regulation changed to include hedge
funds under the Collective Investment
Schemes Control Act there has been an
expectation that hedge funds would
become more mainstream. Although it took
longer than anticipated, we think we are
there. We expect the recent trend of inflows
to accelerate as more advisors and investors
seek the diversification benefits. The
industry has grown by 34% to R185-billion
over 12 months to the end of December
2024. We see this growth sustained over
several years.
How do you generate investment ideas?
Our research process produces a dynamic

2025 HEDGE FUND GUIDE - PROFILE
ranking table, which serves as our primary idea generation tool,
augmented by the output of our machine learning strategies.
What are your typical holding periods?
The holding period for long positions is typically much longer
than those of our short positions. Fundamental ideas are
typically held for years though the weight is varied through
time based principally on valuation and momentum. Shorts,
on the other hand, seldom last longer than nine to 18 months.
To what extent do you incorporate macroeconomic factors
into your investment decisions?
We do pay attention to macroeconomic factors, specifically as
it relates to periods of heightened uncertainty to implement
out of the money downside protection. We also evaluate our
bottom-up portfolio against the current environment to sense
check the exposures we are taking.
What are your strategies for hedging against market
downturns?
During market downturns, short positions and/or derivatives
will protect the downside of our portfolios.
What are the full costs associated with investing in your
hedge fund(s)?
We charge a 1% management fee and a 20% performance fee
above the STeFI benchmark with a highwater mark. Trading and
administrative costs are around 0,5% per annum.
How would you describe the culture in your business?
Collegial, we value diversity and teamwork.
Francois Olivier,
Portfolio Manager,
Mazi Asset Management
BIOGRAPHY
Francois Olivier began his investment career in 2000
and joined Mazi Asset Management in 2013. He is a
senior portfolio manager and a key member of Mazi’s
executive committee, bringing extensive experience
in investment management. Francois completed his
accounting articles with Ernst & Young in 1996 and
his perspective is shaped by a significant tenure in San
Francisco during the early part of his career. His strategic
insights and commitment to value-driven investment
solutions continue to strengthen Mazi’s performancefocused
approach to asset management.
Mazi Asset
Management
Mazi Asset Management is a world-class fund manager
rooted in African heritage. Established in 2006,
the firm has grown steadily to manage assets of
approximately R50-billion. Our purpose is clear:
to manage, protect and grow our clients’ capital through
disciplined investment strategies and a long-term perspective.
Headquartered in Johannesburg with an office in Cape Town,
Mazi is proudly 100% staff-owned. Our independence empowers
us to make objective, long-term investment decisions – free
from external pressures and in the best interests of our clients.
African Roots. Global Vision.
We believe that exceptional investment outcomes are driven by
diversity of thought, experience and perspective. In a dynamic
and often uncertain investment landscape, our research-led
and forward-looking approach helps us uncover high-quality
opportunities, both locally and globally.
Philosophically speaking
Our investment philosophy is grounded in fundamental valuation,
discipline and long-term thinking. We combine deep analysis with
an entrepreneurial mindset to deliver sustainable, high-impact
returns for our clients.
Investment capabilities
Equities
• South Africa Equity
• Global Equity Fund
• Africa Equity Fund
• Shari’ah Equity Fund
• Property Equity Fund
Multi-Asset
• High Equity Balanced Fund
• Stable Fund
• NextGen Flexible Fund
Fixed Income
• Money Market Fund
• Flexible Income Fund
Alternatives
• NextGen Long Short Qualified Investor Hedge Fund
• Mazi Long Short Qualified Investor Hedge Fund
Contact information:
• Phindile Moteane
• Telephone: 010 001 8300
• Email: clientservice@mazi.co.za
• Website: www.mazi.co.za
Mazi Asset Management is an authorised Financial Services Provider. The information contained in this article is for informational purposes only and should not be construed as
financial advice. Please consult a licensed or registered financial advisor for professional guidance tailored to your individual needs and investment objectives.
39

2025 HEDGE FUND GUIDE - FOCUS
Why hedge funds should be
core to pension fund portfolios
Hedge funds offer steady, risk-managed returns – but if they’re so
effective, why aren’t investors using them to their full potential?
It’s time to rethink their role at the core of portfolios.
For many pension fund trustees, hedge funds remain on the
sidelines, often misunderstood, frequently overlooked and
rarely given the airtime they deserve. Yet their consistent
performance through years of market turbulence, their
ability to manage downside risk and their power to smooth
returns over time make them a natural fit for retirement portfolios.
If there was ever a time to reconsider hedge funds, it’s now.
The last few years have served up no shortage of volatility.
From surging inflation and rapid interest rate hikes to renewed
geopolitical instability – not least the ongoing war in Ukraine
and rising tensions around Taiwan, markets have had much to
digest. Add to that an unpredictable US election cycle in 2024,
uncertainty around fiscal and monetary policy and investors have
been navigating an environment defined by risk.
For pension funds, which require both capital preservation
and steady, inflation-beating returns, this landscape can be
especially challenging. Trustees are tasked with meeting
liabilities, preserving members’ savings and ensuring long-term
sustainability – all while avoiding major drawdowns that could
erode value at the worst possible time. It’s a tall order. This is
where hedge funds can help.
Hedge funds have a reputation problem.
To many, the name still conjures images of high-flying traders,
complex strategies and excessive fees. But the reality, especially
in South Africa, is quite different. Local hedge funds are regulated
under the same collective
investment scheme framework
as unit trusts, ensuring
transparency, daily pricing and
strict disclosure. Many strategies
are designed specifically for riskaverse
institutional investors.
They aim not to shoot the lights
out but to manage volatility and
protect capital.
That’s why it’s surprising
how underused they still are.
Regulation 28 allows retirement
funds to allocate up to 10%
to hedge funds, but actual
allocations remain far below
this limit.
40
According to our 2023 Novare Annual Hedge Fund Survey,
total industry assets stand at just R106.8-billion – a fraction of
the R3.87-trillion that’s floating around just in the collective
investment schemes (CIS) industry. This underexposure suggests
that many funds are missing an opportunity to diversify
meaningfully and improve their risk-return profiles.
Globally, this is beginning to shift. A recent Barclays survey
of investors managing over $8-trillion showed that pension
and insurance funds are expected to increase their hedge fund
allocations from 9% to 19% in 2025. Endowments and sovereign
wealth funds are also lifting their exposure. The reason? Hedge
funds have consistently demonstrated their ability to navigate
complexity and deliver positive returns, even when traditional
assets struggle.
In South Africa, the hedge fund industry delivered its best
performance ever last year, according to data compiled by
HedgeNews Africa. HedgeNews Africa’s Fund of Funds Composite
Index, for example, returned 15.9% in 2024 after fees,
outperforming both the FTSE/JSE All Bond Index (13.6%) and
the FTSE/JSE All Share Index (13.4%).
And it wasn’t a one-off. At Novare, we’ve seen our Mayibentsha
range of funds of hedge funds outperform equities and bonds
through nearly every major market shock since 2008, including
the global financial crisis, Nenegate, Covid-19 and the postpandemic
inflation cycle.
In Hard Times: Novare's funds have outperformed during severe market turbulence.

2025 HEDGE FUND GUIDE - FOCUS
What makes hedge funds so effective in these conditions?
It’s the flexibility to use tools that traditional managers often
can’t, including the ability to take short positions, use derivatives
prudently and apply risk overlays to preserve capital. When
markets fall, hedge fund managers don’t just sit on the sidelines;
they can adjust and take advantage by taking short positions.
That ability is invaluable in periods of decline in markets.
Our three Mayibentsha funds are designed with different
risk-return profiles in mind, all aligned with inflation-linked
objectives. The Market Neutral Fund targets CPI +2.5% with a lowto-medium
risk profile; the Moderate Fund aims for CPI +3.5%;
and the Focused Fund, which has a higher risk profile, targets CPI
+4.5%. Each is a fund of hedge funds, drawing on Novare’s two
decades of experience in selecting and monitoring managers
across various strategies, sectors and asset classes.
The name Mayibentsha (meaning “let it be new” in isiXhosa)
speaks to our pioneering role in bringing hedge fund solutions
to South African institutional investors. But the principles behind
these funds are firmly grounded in long-term thinking to manage
risk, protect capital and steadily compound returns over time.
And crucially, the performance has come with less volatility
than traditional asset classes. That makes a difference for
pension funds needing to make monthly payments to members.
Drawdowns in volatile equity markets can force funds to sell
assets at a loss. Hedge funds, with their smoother return profiles,
can reduce this risk, creating more predictable outcomes for
trustees and members alike.
The name Mayibentsha speaks to
our pioneering role in bringing
hedge fund solutions to South
African institutional investors
can underperform in periods of stress. Diversification isn’t just a
buzzword, it’s a safeguard.
Of course, hedge funds aren’t a cure-all. However, if used well,
they can form a core component of a retirement fund’s strategy.
The key is to be clear on what you want the allocation to
achieve such as smoother returns, downside protection or longterm
outperformance. Then, partner with asset consultants or
multi-managers to find the right solutions.
In an environment where uncertainty has become the norm,
hedge funds are no longer a luxury. They are a necessity.
It’s time trustees made better use of them.
Hedge funds have consistently
demonstrated their ability to
navigate complexity and
deliver positive returns, even
when traditional assets struggle
Fees are often raised as a concern, but here, too, much of
the apprehension is outdated. Performance fees, or incentive
fees as they are called, are only charged after a fund beats its
benchmark and all fees are disclosed upfront. In evaluating
hedge funds, trustees should look not just at costs in isolation
but at risk-adjusted returns. The real question isn’t, “Are they more
expensive?”, it’s, “Are they delivering value relative to their cost?”
In short, hedge funds are not just for the adventurous or
the wealthy. In South Africa, they’ve evolved into transparent,
regulated, institutionally focused tools for managing investment
risk. Yet many trustees still default to conventional portfolios
that are heavily exposed to equities and bonds – both of which
Kwazi Mbhele, Portfolio Manager, Novare Investments
41

2025 HEDGE FUND GUIDE - PROFILE
Protea Capital Management
Protea Capital Management is
an investment management
firm domiciled in South Africa,
investing globally. The firm follows
a proprietary “quantamental” investment
approach, combining traditional
fundamental analysis with quantitative
investment techniques. Assets under
management across four hedge funds as at
mid-2025 is approximately R1-billion.
History
The first Protea hedge fund available to
institutional and high-net-worth clients
was launched in 2016, followed by the
launch of two retail hedge funds in
2017. An international Malta-domiciled
hedge fund was launched in 2022, offering
investors the opportunity to invest in
USD/EUR/GBP. The international fund is
approved by the FSCA under Section 65
of the Collective Investment Scheme
Control Act for public sale in South Africa.
Investment strategy
All portfolios are managed as long/short
equity hedge funds, aiming to generate
above-average risk-adjusted returns
while avoiding deep drawdowns. The
core strategy across all Protea hedge
funds is to be long undervalued equities
and short overvalued equities, while
ensuring that there is sufficient
diversification to guard against
inappropriate risk concentration.
Each Protea hedge fund has a distinct
geographical focus.
The Protea South Africa FR Retail
Hedge Fund focuses on the South
African equity market, while the Protea
Global FR Retail Hedge Fund and Protea
International Hedge Fund SICAV Plc
focus on global developed equity
markets. The Protea Worldwide Flexible
FR Qualified Investor Hedge Fund
focuses on equity markets worldwide,
ie both South Africa and global
developed markets.
Employees of Protea Capital
Management collectively represent a
significant investor in the Protea hedge
funds, ensuring strong alignment with
the interests of all other investors.
Investment team
The “quantamental” investment approach
is a “Man + Machine” process which
makes extensive use of automation,
relying less on human judgement than
traditional approaches. The portfolio
manager is Jean Pierre Verster, who is
also the founder of Protea Capital
Management. He holds the CA(SA),
CFA and CAIA designations. Dr Shinhye
Chang, a senior data scientist, forms part
of the investment team.
Assets under
management across
four hedge funds
as at mid-2025
is approximately
R1-billion
Hedge Fund Products
Protea South Africa FR Retail Hedge Fund
Availability: Direct investment or via all
major LISP platforms
Subscription and redemption: Daily
Minimum direct investment: R50 000 lump
sum or R2 000 monthly
Hurdle rate: 3-month STeFI
High-water mark: Yes
Basic service fee: 1.25% pa (excl VAT)
Performance fee: 20% (excl VAT) of the excess
performance (after deducting the base
management fee) above the perpetually
increasing hurdle.
Protea Global FR Retail Hedge Fund
Availability: Direct investment plus via all
major LISP platforms
Subscription and redemption: Daily
Minimum direct investment: R50 000 lump
sum or R2 000 monthly
Hurdle rate: 3-month STeFI
High-water mark: Yes
Basic service fee: 1.25% pa (excl VAT)
Performance fee: 20% (excl VAT) of the
excess performance (after deducting
the base management fee) above the
perpetually increasing hurdle.
Protea Worldwide Flexible FR Qualified
Investor Hedge Fund
Availability: Direct investment or via select
local LISP platforms
Subscription and redemption: Monthly
Minimum direct investment: R1-million
Hurdle rate: 3-month JIBAR
High-water mark: Yes
Basic service fee: 1.25% pa (excl VAT)
Performance fee: 20% (excl VAT) of the
total performance (after deducting
the base management fee) above the
high-water mark, subject to the hurdle rate.
Protea International Hedge Fund
SICAV Plc
Availability: Direct investment or via select
international LISP platforms
Subscription and redemption: Weekly
Minimum direct investment: USD100 000/
EUR100 000/GBP 100 000
Hurdle rate: None
High-water mark: Yes
Basic service fee: 1.25% pa (excl VAT)
Performance fee: 20% (excl VAT) of the
total performance (after deducting
the base management fee) above the
high-water mark.
Contact information:
• Jean Pierre Verster, Edrich Jansen,
Deborah Brennan, Cecile Hechter
• Telephone: 011 822 2154
• Email:
info@proteacapitalmanagement.com
• Website:
www.proteacapitalmanagement.com
42
Protea Capital Management (Pty) Ltd is an authorised Financial Services Provider (FSP49796) under the Financial Advisory and Intermediary
Services Act (No.37 of 2002) (FAIS), acting in the capacity of investment manager. FundRock Management Company (RF) (Pty) Ltd (the
“Manager”) is authorised in terms of the Collective Investment Schemes Control Act (CISCA) to administer Collective Investment Schemes.
This information is not advice, as defined in FAIS.

2025 HEDGE FUND GUIDE - INTERVIEW
Trusting the
“quantamental” process
Jean Pierre Verster, CEO at Protea Capital Management, offers insight into
the diversity of their portfolios.
How would you describe your investment
philosophy as it pertains to managing
hedge funds?
Our philosophy has been refined by combining
unique insights of different investment greats.
We believe that one can learn important lessons
from various successful investors who have
applied quite different investment philosophies
over the years.
We believe that, over time, a company’s
share price will converge with its value.
However, in the short term, price can diverge
significantly from value. This is why we take a
risk-conscious and diversified approach, in
order to generate superior risk-adjusted returns
while avoiding deep drawdowns.
Our philosophy is the foundation for our
“quantamental” investment analysis process,
in terms of which we combine qualitative
fundamental analysis with quantitative
analysis techniques.
What process do you follow to decide what
instruments you will invest in?
The “quantamental” approach is a “Man + Machine”
process which makes extensive use of
automation, relying less on human judgement
than traditional approaches.
The qualitative part of our process entails
reading widely, assessing the management
team of a company, understanding the
product/service and where it fits in within
the economic ecology, scuttlebutt (using
alternative sources to get a different
viewpoint) and constantly being aware of
psychological biases.
The quantitative part of our process entails
using algorithms to automatically forecast
the financial statements of the companies
we analyse, ”translating” the forecasted future
financial statements into fair value using
universal valuation principles, and presenting
the data graphically. We then evaluate past
“fit” of price versus value and adjust key
variables to ensure reasonability of the model’s
projections. The last step is to rank expected
returns for all companies in our universe and
to construct a diversified portfolio of long and
short positions from the ranking table.
What do you see as your
competitive advantage?
Our “quantamental” process allows for both
breadth and depth of analysis. Our portfolios
are therefore more diversified than most,
improving robustness. The extensive use of
automation assists us in guarding against
behavioural biases and avoiding expensive
mistakes. Since our process is based on
universal valuation principles, we can apply
it worldwide in order to seek out attractive
investment opportunities globally, not just in the
local equity market.
How do you manage risk in your
hedge fund(s)?
We are significant investors in our own
hedge funds, and therefore manage the money
of outside investors like we do our own. This
ensures a responsible and commonsense
approach towards risk. We assume risk where
we believe the potential return is worthwhile,
but we actively avoid any catastrophic risk.
The goal is to generate superior risk-adjusted
returns while avoiding deep drawdowns.
What has been your biggest mistake in
managing your hedge fund(s) and what
was the impact?
We had a tough year in 2022, when the Nasdaq index
fell by more than 30%. Our global hedge fund
fell by much less but also generated a negative
return that year. We learnt that options do not
always offer the expected protection against
drawdowns, especially when markets don’t
simply fall sharply but grind lower in a more
orderly fashion. As a result, three years ago,
we shifted more towards maintaining a high
number of small individual shorts, which has
assisted in delivering strong returns.
Jean Pierre Verster, CEO, Protea
Capital Management
BIOGRAPHY
After roles at Melville Douglas
Investment Management and
36ONE Asset Management,
Jean Pierre partnered with
Fairtree Asset Management in
2016 to launch the Protea range
of hedge funds. In 2019, he founded
Protea Capital Management
as a stand-alone investment
management business. Between
2015 and 2024, Jean Pierre also
served as an independent nonexecutive
director at Capitec
Bank Holdings and its subsidiaries,
where he was chair
man of the audit committees.
He holds the CA(SA), CFA and
CAIA designations.
Collective Investment Schemes are generally medium-to long-term investments. The value of participatory interests (units) may go down as well as up. Past performance is not necessarily a guide to future
performance. Collective investments are traded at ruling prices and can engage in scrip lending and borrowing. A schedule of fees, charges and maximum commissions, as well as a detailed description of how
performance fees are calculated and applied, is available on request from the Manager. The Manager does not provide any guarantee in respect to the capital or the return of the portfolio. Excessive withdrawals from
the portfolio may place the portfolio under liquidity pressure and in such circumstances, a process of ring-fencing of withdrawal instructions and managed pay-outs over time may be followed. Commission and incentives
may be paid, and if so, are included in the overall costs. The Manager may close the portfolio to new investors in order to manage it efficiently according to its mandate. Prices are published daily on the Manager’s website.

2025 HEDGE FUND GUIDE - PROFILE
Rozendal Partners
Rozendal Partners
Rozendal Partners, established in
2017, is an independent investment
management firm based in Cape Town.
We manage a South African hedge fund
and a global equity fund, amounting to
R2.5-billion in assets under management.
At Rozendal Partners, we value the
partnership between our firm and our
investors, closely aligning our interests
to ensure a steadfast commitment to
long-term investment excellence.
At Rozendal Partners,
we employ a
disciplined, valuationbased
investment
process to identify
compelling local and
global opportunities
Who we are
Our business was founded by Wilhelm
Hertzog and Paul Whitburn. Wilhelm
is a chartered accountant and CFA
Charterholder and Paul obtained an
honours degree in Finance and Portfolio
Management and has attended an
executive programme in Value Investing
at Columbia University. Wilhelm and
Paul co-manage the Rozendal funds.
They are seasoned investment managers
with extensive experience in the South
African and global equity markets.
Investment philosophy
At Rozendal Partners, we employ a
disciplined, valuation-based investment
process to identify compelling local
and global opportunities, predominantly
in equity markets. Our goal is to
compound capital at high rates over long
periods while limiting the risk of loss to
prudent levels. Our funds are managed
using a multi-counsellor approach,
ensuring our investors benefit from the
collective expertise and experience of
our portfolio managers.
Investment process
Our investment ideas stem from staying
attuned to market developments,
extensive reading and maintaining a
somewhat contrarian mindset. Our
investment process is designed to
provide our portfolio managers with
the best possible environment to apply
sound judgement and make informed,
rational decisions. By fostering such an
environment, we enable our managers to
take a long-term view, free from short-term
psychological pressures. This approach
distinguishes us from others: rather than
merely observing market opportunities,
we are able to actively implement sensible
investment strategies.
Our investment ideas
stem from staying
attuned to market
developments,
extensive reading
and maintaining
a somewhat
contrarian mindset
Our team has first-hand experience
dealing with the pressures that often
lead investors astray. This experience
equips us to better handle such
pressures in the future, allowing us to
stay true to our investment philosophy.
We understand that true value is built
over time and therefore look to foster
relationships with like-minded financial
advisors and investors to build lasting
wealth together.
Rather than merely
observing market
opportunities, we
are able to actively
implement sensible
investment strategies
Product offerings
We manage two funds: the Rozendal
Worldwide Flexible Prescient QI Hedge
Fund, which provides investors with
our best investment view, across local
and global assets in a single fund.
Additionally, we manage the Rozendal
Global Fund, denominated in USD, as well
as a ZAR-denominated feeder version
for investors looking to invest globally
in rands. Both our funds are managed
under flexible mandates, predominantly
equity-focused and aim to capitalise on
investment opportunities across all asset
classes and sectors.
Hedge fund offered
Rozendal Worldwide Flexible Prescient
QI Hedge fund.
Contact information:
• Wilhelm Hertzog/Paul Whitburn
• Telephone: 021 286 6716
• Email: info@rozendal.com
• Website: www.rozendal.com
Collective Investment Schemes in Securities (CIS) should be considered as medium-to-long-term investments. The value may go up as well as down and past performance is not necessarily a guide to future performance.
CISs are traded at the ruling price and can engage in scrip lending and borrowing. A schedule of fees, charges and maximum commissions is available on request from the Manager. A CIS may be closed to new investors
in order for it to be managed more efficiently in accordance with its mandate. Performance has been calculated using net NAV to NAV numbers with income reinvested. There is no guarantee in respect of capital or
returns in a portfolio. Prescient Management Company (RF) (Pty) Ltd is registered and approved under the Collective Investment Schemes Control Act (No.45 of 2002). For any additional information such as fund prices,
fees, brochures, minimum disclosure documents and application forms please go to www.prescient.co.za. The Rozendal Global Fund is registered and approved under section 65. A Feeder Fund is a portfolio that invests
in a single portfolio of a collective investment scheme which levies its own charges, and which could result in a higher fee structure for the feeder fund.
44

A long-term perspective
Rozendal Partners is willing to explore parts of the market that others
often overlook or avoid completely, creating value for you.
Paul Whitburn,
Analyst and Portfolio
Manager, Rozendal
BIOGRAPHY
Paul graduated with a
BCom Accounting degree
from Stellenbosch University
before completing
his BCom Honours degree
in Finance and Portfolio
Management (Cum Laude)
from the University of Cape
Town. He was a founding
partner at BlueAlpha
Investment Management
managing long/short
equity hedge funds and
long-only mandates.
Paul then attended
an executive programme
in Value Investing at
Columbia University
and has followed that
investment philosophy
ever since. He then
joined RECM as an
analyst and finally as
a portfolio manager,
building further on his
investment experience.
Paul enjoys travelling the
world meeting companies
and experts to uncover
investment opportunities.
He also enjoys spending
time cycling and on family
beach holidays. Rozendal
Partners fulfils his life-long
dream of building a great
company with his partners.
How would you describe your
investment philosophy?
We employ a valuation-based investment
philosophy. Our objective is to identify
mispriced assets by consistently looking
at areas of the market where the likelihood
of mispricing is higher than average. While
our approach is somewhat contrarian,
we only take such positions where true
mispricing occurs. We dedicate our
efforts to understanding each investment
opportunity well enough to make a
reasonable estimate of its fair value.
What process do you follow to decide
what instruments you will invest in?
Our investment ideas mainly arise from
being aware of developments in markets,
reading widely and maintaining a somewhat
contrarian mindset. We tend to find
opportunities in areas of markets towards
which there is clearly visible aversion by
the general market, which is being ignored,
has been neglected or which is more
complicated to analyse and requires deeper
research than what the average market
participant is willing to engage in. We rarely
screen markets systematically but do so
when we are building an understanding of
a market with which we are not yet familiar.
As fundamental, valuation-based investors,
the main objective of our research process
on a new idea is to determine a reasonable
estimate of fair value for the asset in
question. If we believe this is achievable, we
compile a research report that demonstrates
our understanding of the asset’s economics,
outlines why it may be mispriced and
explains how our valuation differs from the
market’s. The investment team then reviews
the report and if approved, the asset is
added to our investable universe.
What do you see as your
competitive advantage?
We see our edge as primarily behavioural.
We're willing to explore parts of the
market that others often overlook or avoid
completely. Thanks to our stable, longterm
capital base, we can take a genuinely
long-term view of the assets we invest in.
2025 HEDGE FUND GUIDE - INTERVIEW
By investing alongside our clients, in funds
with flexible mandates, we aim to align
our interests to that of our investors while
eliminating short-term noise, emotion and
certain behaviours that can detract from
true value creation.
How do you manage risk in your
hedge fund(s)?
Risk management starts within our
investment process through our analysis
and understanding of an asset’s fair value
and buying assets at a significant discount
to our estimate of fair value. Furthermore,
appropriately sizing our investments and
maintaining a diversified overall portfolio
further reduces risk within our fund. The
flexibility of using a hedge fund structure
further allows us to employ certain strategies
to hedge against adverse macroeconomic,
currency and specific risks that may present
themselves from time to time.
What has been your biggest mistake in
managing your hedge fund(s)?
A common challenge with value investors is
the tendency to be early, both in buying and
selling assets, which can significantly detract
from long-term performance. Over time,
we have increasingly come to incorporate
factors like momentum, insider activity and
the presence or absence of catalysts in our
portfolio construction.
What are your typical holding periods?
We invest with a long-term perspective,
often holding investments for several
years. Our fund therefore typically exhibits
low turnover; however, changes in our
investment thesis or conditions that
significantly alter an investment's economics
may change our investment timeframe.
What is your track record?
Our hedge fund has shown resilience across
different market cycles and built a solid track
record. Being valuation-based investors,
the Rozendal Worldwide Flexible Prescient
Qualified Investor Hedge Fund (A class units)
has delivered an annualised return of 12%
since its inception in February 2018.
Wilhelm Hertzog,
Analyst and Portolio
Manager, Rozendal
BIOGRAPHY
When Wilhelm’s father
bought him a few shares
in a company as a young
boy, Wilhelm spent days
trying to figure out the
physical size of the piece of
the business he owned.
Wilhelm’s understanding of
investments has come a long
way since then, although he
still finds certain market
developments baffling.
Despite taking Latin and
not accounting at school
to study law, Wilhelm
eventually qualified as a
Chartered Accountant and
obtained the CFA charter.
He then spent 12 years
working alongside some of
the most renowned capital
allocators in South Africa,
first at PSG Group and then
at RECM. After gaining
incredible experience,
Wilhelm joined likeminded
partners to found
Rozendal Partners.
Wilhelm has a very
wide field of interests, and
predictably enough spends
very little time pursuing most
of these. But his first loves are
his family and allocating
capital, and he manages to
find ample time for those.
45

2025 HEDGE FUND GUIDE - PROFILE
Differential Capital
Headquartered in Bryanston,
Johannesburg, and Newlands,
Cape Town, Differential Capital
was established in 2018 as an
owner-managed boutique AI-led asset
manager. Initially focused on the Gradient
Hedge Fund, it has since expanded into
long-only equity, global equity and special
situations strategies.
Ownership and clients
Differential Capital is privately owned,
with 75% held by co-founders and staff,
and 24.99% by Standard Bank Group. The
business primarily caters for South African
institutional investors (retirement funds,
multi-managers and private clients), with
retail access via structured AMC offerings.
As of June 2025, Differential Capital
manages R5-billion, with 98% sourced
from institutional investors.
Meet the team
• Vincent Anthonyrajah – CEO and Portfolio
Manager (BSc Actuarial Science, FIA, CERA,
20+ years of experience).
• Sam Houlie – Co-CIO (Fundamentals),
CA(SA), CFA, ESG certification, 30+ years
of experience.
• Musa Malwandla – Co-CIO (AI/Data
Science), PhD Finance, MSc Statistics, 13+
years of experience.
• Jeremy Naguran – CTO, financial technology
specialist (20 years of experience)
with an MBA.
• Ayesha Hendricks – Head of Business
Development, BCom Hons FAPM, MBA,
20 years of experience.
The investment team is divided into
fundamentals (led by Sam Houlie) and AI/
data science (led by Musa Malwandla)
and works collaboratively to generate
differentiated insights. With over 70% of the
firm’s total team dedicated to investments,
Differential Capital demonstrates a deep
commitment to expertise and researchdriven
decision-making. The broader staff
handle operations, ESG administration and
client servicing.
46
Philosophy
Differential Capital employs an AI-led
investment philosophy combining machine
learning, data science and fundamental
analysis. The firm believes market
inefficiencies stem from differences in how
investors access and interpret information.
The strategy focuses on pricing inefficiencies,
applying rigorous analysis to both long
and short positions. Long positions seek
mispriced quality and growth opportunities,
while short positions target overvalued or
struggling stocks. This approach is embedded
across all strategies, including hedge funds,
where short positions play a key role in
alpha generation.
Clients benefit
from rigorous
reporting standards,
independent valuation
processes and full
regulatory compliance
Investment strategies
Differential Capital’s AI-led investment
strategies offer high-performance solutions
that enhance portfolio resilience while
providing valuable diversification benefits
for financial planners and their clients.
With market-leading returns, including the
Gradient Hedge Fund’s 25.39% net return in
2024, Differential Capital presents an attractive
alternative to traditional asset classes.
Clients benefit from rigorous reporting
standards, independent valuation
processes and full regulatory compliance,
ensuring transparency and accountability
in portfolio management. A specialised client
service team ensures seamless interactions,
timely updates and personalised solutions. By
integrating AI-powered investment strategies,
investors can enhance portfolio returns,
effectively manage risk and leverage diversification
advantages to ensure resilient longterm
outcomes.
Trust the process
Ideas originate from proprietary screening
models, undergoing fundamental review
by the investment committee. The
firm follows a style-agnostic approach,
leveraging AI and machine learning to
uncover mispriced securities. Portfolio
construction is disciplined, balancing
position sizing, risk budgeting and strategic
alignment. Institutional clients receive
direct support from senior leadership, with
tailored reporting, performance attribution
and risk updates.
Product offering
• Gradient Hedge Fund (QIHF): Multi-strategy
hedge fund.
• SA Equity Fund (Neural): High-conviction
long-only strategy.
• Special Situations Hedge Fund: Eventdriven,
activist investing.
• Kyrios Global Equity Fund: AI-enhanced
global owner-managed equity strategy.
• AMC Access: Structured retail exposure
via AMC 015 (Gradient Multi Strategy) and
AMC 016 (Kyrios Global Equity).
Performance
The Gradient Hedge Fund delivered 25.39%
net return for the 12 months to December
2024, earning the Best Multi-Strategy
Hedge Fund Award from HedgeNews Africa.
Suited for medium-term investors, this
concentrated multi-strategy hedge fund
was launched in 2019, aiming to generate
superior risk-adjusted returns of 3-6% above
cash (after fees). Differential Capital stands
for excellence, resilience and innovation,
with an adaptable investment philosophy
that evolves with market conditions and
technological advancements.
Contact information:
• Ayesha Hendricks (Head of Business
Development)
• Telephone: 087 1072123 / 083 273 4864
• Email: ayesha.h@differential.co.za
• Website: www.differential.co.za

2025 HEDGE FUND GUIDE - PROFILE
Senqu Capital
Senqu Capital was established with
the objective of generating superior
returns for our investors over the
medium to long term. We manage
a single hedge fund strategy that expresses
our very best ideas at any given point in
time and we invest directly alongside you
in this fund.
We aim to attract partners who believe
in our investment process, have a long
investment time horizon and who are
unlikely to redeem capital in times of
market panic. We focus on the quality
of our investor base and recognise how
this benefits all our investors collectively.
We recognise that trust is earned and
endeavour to communicate with partners
in a manner that is transparent so as to
continuously enhance your confidence in
our process.
Fund overview
Launched in 2016, Senqu Capital is an
independent investment manager based
in Johannesburg and founded by Stephen
Carew and Andrew Crawford – former
portfolio manager and head of business
development, respectively, at Capricorn
Fund Managers. The core team also
includes analysts Daniel Friedman and
Kgosi Mashigo, who work closely with
the founders in driving the investment
strategy. The team focuses on managing
capital and building strong relationships
with clients, while outsourcing all noninvestment
operations to best-in-class
service providers.
The Senqu Worldwide Flexible Long
Short Prescient RI Hedge Fund has built
an eight-year track record and delivered
a 15.6% annualised return over the past
three years. The fund has been consistently
recognised for performance, winning New
Fund of the Year in 2017 and ranking as
a top-performing fund in both 2023 and
2024 within its category.
Senqu Capital is supported by Stockdale
Street – the investment arm of Mary
Oppenheimer and Daughters – which
provided seed capital and continues to offer
Andrew Crawford,
co-founder,
Senqu Capital
strategic guidance, a robust governance
framework and access to global networks.
Investment philosophy
At the core of our philosophy is a
differentiated approach to stock selection.
We focus on dominant global companies
with structural moats, analysing each
through a commercial lens to understand
the fundamental forces driving long-term
value creation.
Our process builds deep conviction,
allowing us to invest in size behind our
highest-conviction ideas. We are not
swayed by short-term market noise and
are comfortable going against prevailing
sentiment when pricing dislocations
create opportunity. Rather than reacting
to market shifts, we define long-term glide
paths for each company and invest as their
performance diverges from those paths.
Our relentless pursuit of quality has
resulted in a portfolio with meaningful
offshore exposure.
As a worldwide flexible fund, we
are not limited by geography, and we
see no trade-off between SA and offshore;
we invest in both and allow
prospective returns to dictate where our
capital flows. Our local expertise and
relationships give us a home-ground
advantage in South Africa, while our
global experience over the past eight years
has cultivated a unique pool of offshore
investment opportunities.
Stephen Carew,
co-founder,
Senqu Capital
Fund structure
Operating as a hedge fund gives us
maximum flexibility to manage risk and
enhance returns.
We selectively use tools such as short
selling, options and currency management
to protect capital and take advantage of
varied market conditions.
While leverage is used conservatively,
the structure allows us to respond
dynamically – allocating capital where we
see the most compelling value, without
being restricted by rigid mandates.
Risk management is embedded
throughout our process. It starts at the
individual position level, where we assess
business-specific risks and calibrate
position sizing accordingly. At the
portfolio level, we overlay macroeconomic
considerations to ensure a balanced and
resilient overall risk profile.
Accessibility
The fund is available on major platforms
including Glacier, Ninety One and
Momentum Wealth, making it accessible to
both retail investors and wealth managers.
Contact information:
• Andrew Crawford | Stephen Carew
• Telephone: 011 243 5059
• Mobile: 083 557 4541
• Email: andrew@senqucapital.com
• Website: www.senqucapital.com
47

2025 HEDGE FUND GUIDE - PROFILE
SouthernCross
Capital
SouthernCross Capital, based
in Paarl, Western Cape, was
founded by Cobus Potgieter
and Wilhelm Landman who
have spent their entire careers in hedge
fund management. The company is
100% owner-managed and has an AUM
of R450-million, broken down into
R350-million hedge fund and longonly
R100-million.
Client profile
Our typical client profile is a split
between financial advisors, advisordriven
cat IIs, DFMs and institutional
multi-managers.
Meet the team
The team at SouthernCross Capital is
made up of four key individuals. The
management team consists of the
founders, Wilhelm Landman and Cobus
Potgieter, both of whom have extensive
experience in investment.
The investment team also consists
of the two founders alongside Pieter
Slabbert, who supports the portfolio
managers through investment research,
financial modelling and quantitative
analysis. He has a BCom Honours in
actuarial science from Stellenbosch
University where he is pursuing a Master’s.
Emily Wright is the final member of
the team. She is a qualified chartered
accountant (CA) who graduated
from Stellenbosch University. At
SouthernCross, she oversees financial
strategy and operational efficiency,
bringing strong analytical skills and
international experience.
Investment philosophy
SouthernCross Capital believes that
distortions related to differing mandates,
views, indexing and sentiment will
consistently cause markets to be
inefficient. We also hold that there is
excess absolute return to be extracted
in providing liquidity to these divergent
market participants while always
48
remaining anchored in the fundamental
value of the underlying asset.
SouthernCross Capital seeks to exploit
these opportunities in isolation, controlling
for exogenous risks to generate alpha
over and above expected returns.
The hedge funds
tend to deliver
superior returns for
less risk relative to
traditional investments
Products and benefits
The inclusion of a SouthernCross hedge
fund to a portfolio offers several benefits:
• The hedge funds tend to deliver
superior returns for less risk relative to
traditional investments.
• SouthernCross hedge funds have a
history of delivering positive returns
during periods of turmoil, as the
equity arbitrage opportunities that
the investment team specialise in excel
when there is blood in the streets.
• The hedge funds are uncorrelated to
the other components of the portfolio,
offering the truest diversifier readily
available to the end investor.
• Given the low rate of adoption to
date, hedge funds are one of few tools
available to advisors to enhance their
offering relative to their peers that are
slower to adapt.
Process to develop and implement
investment solutions
We offer funds where we believe we have
an edge over the broader market and as
such, we offer the low equity SouthernCross
NCIS Market Neutral Hedge Fund, medium
equity SouthernCross Prescient Multi-
Strategy Hedge Fund and SA high equity
SouthernCross BCI Equity Fund. Our
particular expertise is in equity arbitrage,
where we generate returns by exploiting
relative differences in equity instruments
without assuming market risk.
Process for servicing clients
Because we are boutique and small we
are able to grant our limited number
of clients extraordinary engagement
and are able to work with clients to
develop products they require.
Different types of funds offered
• Market Neutral Hedge Fund
• Multi-Strategy Hedge Fund
• SA Equity Fund
The investment team has hedge funds in
their blood. Even though SouthernCross
offers a traditional equity fund, the hedge
funds are the flagship products. The
equity fund is managed through the lens
of a hedge fund with various marketneutral
strategies ported on top of an
equity benchmark.
Performance
Market Neutral
• 8.96% per annum since inception.
• 11.31% per annum over the past 3 years.
• 8.84% per annum over the past 5 years.
• 86% positive months since inception.
• Low volatility absolute returns, few
drawdowns and no negative 12-month
period since inception.
Multi-Strategy
• 15.31% per annum since inception.
• 17.75% per annum over the past 3 years.
• Significant outperformance of Capped
Swix (15.86%) and ASISA MA High
Equity (13.35%) with reduced levels of
volatility without experiencing a negative
12-month period since inception.
Contact information:
• Cobus Potgieter
• Telephone: 021 879 1158
• Email: info@southerncrosscapital.co.za
• Website: www.southerncrosscapital.co.za

2025 HEDGE FUND GUIDE - INTERVIEW
The algorithmic execution experts
SouthernCross Capital is in the business of delivering steady risk-adjusted
returns in all market conditions.
Wilhelm Landman,
Portfolio Manager,
SouthernCross Capital
BIOGRAPHY
Wilhelm holds a BCom
Honours in Financial
Analysis and is a CFA
Charterholder. He has a
decade of experience in the
investment industry, with a
particular focus on equity
long/short strategies and
corporate action arbitrage.
Prior to establishing
SouthernCross Capital,
Wilhelm spent four years
as a Portfolio Manager at
AIP Capital Management.
He began his career at
Nitrogen Fund Managers,
gaining three years of
foundational experience in
equity analysis.
How would you describe your
hedge fund management business?
With over R400-million in assets under
management and an eight-year track record,
SouthernCross Capital manages a marketneutral
hedge fund, a multi-strategy hedge
fund and an equity long-only unit trust. We
focus on delivering consistent, uncorrelated
returns. We are owner-managed and the
portfolio management team all have most
of their personal net worth invested in
SouthernCross funds. As investors ourselves,
we are therefore motivated to maintain the
quality of the funds as our clients are.
What is your competitive advantage?
We specialise in equity arbitrage, particularly
corporate structure arbitrage and corporate
action arbitrage. To this end we possess a
deep understanding of corporate structures,
dissecting and analysing the underlying
components of company balance sheets, as
well as an extensive knowledge of the South
African corporate action process.
Corporate structure arbitrage entails any
situation where we can gain exposure to a
company through multiple listed entry points,
creating the opportunity to exploit divergence
in value between these entry points in a lowrisk
fashion. Corporate action arbitrage trades
occur through the transactions conducted
by listed companies, which often create
mispricing and thus the opportunity for
exploitation by hedge funds. These include
merger arbitrage, rights issues, restructurings,
other secondary offerings and convertible
bond arbitrage.
In order to exploit these opportunities
efficiently, we utilise and are highly
experienced in algorithmic execution. We have
developed a proprietary electronic order and
portfolio management system to assist in the
management of complex positions.
The arbitrage opportunities typically
provide an attractive return given that they are
low risk in nature. They provide the foundation
for all our strategies, delivering steady riskadjusted
returns in all market conditions, with
the propensity to outperform significantly
during periods of market chaos. They are
well-suited to being combined with the higher
return/risk directional equity and fixed income
strategies in our funds.
How do you manage risk in your
hedge funds?
We limit risk through diversification and
position sizing limits. Corporate structure
and corporate action arbitrage positions
are managed on a per-position framework
based on the likelihood of their return. As
these positions have limited downside and
high certainty of return, they tend to be large
components of the funds.
Relative value positions, that is to say equity,
pairs where we are both long and short a share
from the same sector, are restricted in size on a
per-position basis to limit concentration. Even
a highly convicted pair will never exceed 10%
of the fund.
Directional exposure, like long short
equity, is typically unconcentrated and highly
diversified. These position sizes range from
0.5% to 4% of the funds.
What is your track record?
The SouthernCross NCIS Market Neutral
Retail Hedge Fund, launched in October
2017, has delivered a net annualised return of
8.7% to date, including 12.1% over one year,
10.6% annualised over three years and 8.7%
annualised over five years. This performance
was delivered with consistency while
protecting against the downside, as the fund
boasts 86% positive months since its inception.
The SouthernCross Multi-Strategy Prescient
Retail Hedge Fund, launched in August 2020,
has achieved a net annualised return of 14.5%,
including 21.6% over one year, and 15.5%
annualised over three years. The fund thus
provided equity returns while still maintaining
67% positive months.
The core arbitrage strategies provide
significant repeatability of returns and
downside protection to both hedge funds,
and when combined with other un-correlated
equity and fixed income strategies deliver
attractive risk-adjusted returns. These arbitrage
opportunities have historically outperformed
during times of market turmoil, and therefore
our funds tend to outperform significantly
during market sell-offs.
Cobus Potgieter,
Portfolio Manager,
SouthernCross Capital
BIOGRAPHY
Cobus holds a BCom
Honours in Investment
Management and is
both a CFA and CAIA
Charterholder. With over
15 years of investment
experience, he brings
deep expertise in
hedge fund strategy,
portfolio construction
and risk management.
Before co-founding
SouthernCross Capital,
Cobus served as Chief
Investment Officer and
Portfolio Manager at AIP
Capital Management for
four years. He previously
spent eight years as
a Senior Analyst at
Nitrogen Fund Managers,
where he honed his skills
in equity research and
arbitrage strategies.
49

2025 HEDGE FUND GUIDE - PROFILE
Terebinth Capital
Located in Bellville, Cape Town,
Terebinth Capital is a researchfocused,
client-centric money
manager that was founded
in 2013. It is a 100% manager-owned
and privately-held company and is a
B-BBEE Level 1 contributor. With an AUM
of R36.7-billion, Terebinth Capital deals
with a blend of retail and institutional
clients on a national scale. The investment
team includes Erik Nel (CIO), Kanyane
Matlou (Dep-CIO), Nomathibana Okello,
Oyena Mtuzula, Dumisani Ngwenza,
Ann Sebastian, Athenkosi Mjebeza and
Carmen Nel.
Investment philosophy
Terebinth Capital subscribes to the theory
of cycles. Using scenario analysis, we
construct diversified portfolios that
always reflect our best investment
view. Our active approach incorporates
disciplined risk management. Markets are
inherently cyclical, prone to periods of overoptimism
and extreme pessimism. We
apply a two-fold approach to determine
asset and security allocation, combining
macro analysis and quantitative precision.
Using scenario
analysis, we
construct diversified
portfolios that always
reflect our best
investment view
A macro philosophy leads to low
correlation with broader markets and
reduces volatility of returns. We value
scenario analysis, as it is impossible and
imprudent to position for a single outcome.
The Terebinth range of funds (Fixed
Income, Multi Asset, Bond, SA Property,
Equity and Hedge Funds) are carefully
curated and meticulously managed to
meet the investment goals of advisors and
clients. We partner with advisors to ensure
we treat clients fairly, focus on education
and provide transparent information. The
clients can rest assured that the focus is on
capital protection with managed upside.
Advisors can with confidence consider
the focussed range of funds for clients
that value liquidity, capital preservation
and steady returns – with hedge fund
capabilities that do not compromise on
transparency or risk discipline.
A macro philosophy
leads to low correlation
with broader
markets and reduces
volatility of returns
Following the process
We believe that there is no substitute for
high-conviction investment strategies
rooted in painstaking research and
knowledge of the fundamentals if
you want to deliver solid returns for
your clients consistently. We favour a
relentless focus on the fundamental and
underlying themes that we believe will
drive society, the economy and markets
over months and years rather than the
market fads that have a shelf life of hours
or days. We don’t pretend that we have all
the answers. However, we are convinced
that through constant introspection,
learning from our mistakes, reviewing our
process and performance, and developing
our talent, we can be better. We combine
qualitative and quantitative disciplines –
structural, technical, tactical – to identify
opportunities, especially within fixed income
and macroeconomic themes.
What's on offer?
Terebinth Capital currently manages 10
diversified strategies (Money Market,
Enhanced Income, Aggressive Income,
Multi-Asset Income, Active Bond, Inflation
Tracker, Multi-Asset Flexible, Multi-Asset Low
Equity, Active Equity, FI Macro Hedge and
Total Return). Our equity unit was launched
in 2021, with a focus on active strategies,
adding to the beta equity strategies
managed previously.
Hedge funds are a cornerstone in the
investment products range, not only as an
investment offering but also integral to the
investment philosophy and risk management
strategies.
All in the performance
The sustainability of our business lies in
our ability to produce consistent superior
long-term investment performance,
provide client service excellence and
ensure client retention and the integrity
of our business. We are the custodians of
some of the largest retirement funds in
the country and we see our investment
activities and investment performance as
having a tremendous impact on the quality
of life of retirement fund members once
they retire. Our focused product range is a
strategic advantage. It ensures concentration
of ideas and attention, which leads to better
investment performance.
Contact information:
• Mario Schoeman
• Telephone: 032 698 999
• Email: Mario.schoeman@
terebinthcapital.com
• Website: www.terebinthcapital.com
Terebinth Capital Proprietary Limited is a licensed Financial Services Provider (License Number 47909).
The investments described in this article are generally regarded as medium to long-term investments. Past performance is not necessarily indicative of future performance. The value of investments may rise as well
as fall and you may not get back the full amount you invested. The funds or portfolios mentioned are market-linked and there are risks associated with investments in market-linked financial products. Fluctuations
or movements in exchange rates may cause the value of underlying investments to go up or down.
50

2025 HEDGE FUND GUIDE - INTERVIEW
Disciplined, dynamic investing
Terebinth Capital is a research-focused, client-centric money manager
that believes in a consistent investment process and team approach.
How would you describe your investment
philosophy as it pertains to managing a
hedge fund(s)?
Terebinth Capital is a research-focused, clientcentric
money manager. We subscribe to the
theory of cycles. Using scenario analysis, we
construct diversified portfolios that always reflect
our best-investment view. Our active approach
incorporates disciplined risk management. We
deem it impossible and imprudent to manage
assets for a single specific outcome, based
on a point forecast. Rather, we believe in the
value of scenario analysis, not only as part of
portfolio optimisation, but also as part of our risk
management process. We maintain that sustained
long-term outperformance is about managing and
limiting the downside risk in a portfolio.
What process do you follow to decide what
instruments you will invest in?
Our strategy selection approach involves diversifying
across instruments and across the interest
rate curves. Over time, this is a very well-diversified
fund, using the broad spectrum of the South
African income universe to generate positive alpha.
Our range of interest rate products include
bonds, swaps, FRAs, futures, options, forex and
index-linked products.
There is no natural bias in this fund with regards
to instruments or assets other than the keen focus
to always attempt to be exposed to the deepest
and most liquid pools in the income space. This
can only be achieved through active portfolio
management and a strong focus on market and
economic conditions.
How would you describe the culture in
your business?
Our culture is defined by our diverse, progressive
and highly committed team of experts. We’re
all different and we’re all respected for our
differences. We collaborate in a respectful, inclusive
way and allow each other to be who we need
to be to do the best job. We believe we benefit
from our unique culture of partnership, service,
nimbleness, drive and humility. We must focus on
our people, their safety, their physical and mental
wellbeing, their personal development and their
commitments to each other, to justice and equity,
and to society at large.
What do you see as your
competitive advantage?
Our focused product range is a strategic advantage.
It ensures concentration of ideas and attention,
which leads to better investment performance.
• Consistent investment process and team
approach;
• A truly transformed, employee-owned business
with a pay-it-forward philosophy;
• Rigorous risk management with mandated
stop-losses and third party independent risk
reporting;
• We apply a two-fold approach to determine
asset allocation, combining macro analysis and
quantitative precision; and
• Team uncovers and synthesises new information
quickly and acts with agility to ensure a best
investment view at all times.
How do you manage risk in your
hedge fund(s)?
We construct portfolios with key consideration
given to maximise the expected return of
the portfolio while minimising the risk – with a
strong focus on liquidity. We run mandated stop
losses on our hedge strategy.
How do you see the future of the hedge
fund industry?
We see how hedge funds can remain a key
component of building robust portfolios in the
future. However, the legislative environment is
required to play its part by not hindering the
ability of asset owners to utilise hedge funds
in their portfolios. Allowing CIS products to
invest in hedge funds would be a step in the
direction of easing the use of hedge funds by
asset owners.
What are your strategies for hedging against
market downturns?
Despite the mandated VaR of 20%, monthly, 99%
confidence level of this fund, many strategies are
hedged/relative value in some form or another.
This is not a pure arbitrage fund, nor a pure relative
value one. There are no bucket-specific restrictions
and therefore the manager will use their skill across
the income product range to ensure that the fund
is optimally positioned for market conditions
at the time, using hedges where appropriate.
Nomathibana Okello,
Managing Director,
Terebinth Capital
BIOGRAPHY
Nomathibana is the Managing
Director (MD) of Cape Townbased
boutique asset management
firm, Terebinth Capital,
where she is an equity partner
and Senior Portfolio Manager.
In her role as MD, she oversees
the strategic direction of the
business. She also has Portfolio
Management responsibilities
across the Fixed Income product
set, including Income, Bond and
Hedge mandates. Nomathibana
has a Master of Philosophy
degree, with a major in
Mathematics of Finance and a
Bachelor of Business Science,
with a major in Actuarial Science
from the University of Cape Town.
She is also a CFA Charterholder.
51

2025 HEDGE FUND GUIDE - PROFILE
Visio Fund Management
Visio is one of the longest-running
investment firms managing hedge
funds which was founded in June
2003 by our CIO Patrice Moyal.
Visio is based primarily in Johannesburg
and Cape Town, South Africa, and also has
a research presence in the USA, Israel and
Australia. The firm manages assets on behalf
of both domestic and offshore institutional
and retail clients including pension funds,
family offices, multi-managers, sovereign
wealth funds and retail investors. Royal
Investment Managers, a JV between
Royal Bafokeng Holdings and Investment
Managers Group, holds a minority equity
stake in the business. Visio is a Level 1
B-BBEE contributor and a signatory to the
UN Principles for Responsible Investing.
People
Ofri Kahlon heads up the firm’s hedge
fund strategy, under CIO Patrice Moyal,
and has been part of the Visio team
since 2006. The team consists of 14
investment professionals who have over
260 years of combined experience and
have a range of backgrounds including
accounting, engineering, mathematics,
commerce and economics. Several of the
investment professionals also hold CFAs
and MBAs. There are five operational
support staff focused on client service and
business development.
Investment approach
Visio’s investment philosophy has been
firmly rooted in fundamental analysis. We
are focused on capital preservation and
follow a disciplined, fundamentally focused
bottom-up research approach while being
cognisant of the world around us. This
philosophy and process has been applied
to hedge funds since 2003. Our approach is
predominantly (90%) bottom up and sector
or theme specific, with a top-down macrooverlay
(10%).
Ofri Kahlon,
Portfolio Manager,
Visio Fund
Management
Our investment philosophy always has
the capital preservation mindset foremost in
our approach which is focused on downside
protection. To achieve this end, we focus on
quality businesses with strong management
teams, good governance, solid balance
sheets and attractive free cash flow
yields. The team engages with the boards
of companies to unlock value through
constructive engagement or activism.
Products
From a hedge fund
perspective, Visio offers
both qualified investor
and retail investor hedge
funds as follows:
Qualified investor hedge
funds
• Visio FR Golden Hind
Qualified Investor
Hedge Fund
• Visio FR Occasio Qualified
Investor Hedge Fund
• Pricing and dealing monthly
Retail investor hedge funds
• Visio FR Retail Hedge Fund
• Pricing and dealing daily
Since 2004, Visio has diversified its product
offering across long-only SA equities,
Patrice Moyal,
CIO, Visio Fund
Management
multi-asset balanced funds, offshore USD
hedge funds, global equity, fixed-income
mandates and property funds.
Performance
Visio has won HedgeNews Africa Hedge
Fund Awards for both its rand and US dollar
denominated funds over the years. The since
inception returns for our rand hedge funds
are summarised as follows at 30 April 2025:
PERFORMANCE ANALYSIS GOLDEN HIND ALSI CASH INCEPTION
ANNUALISED RETURN 17.4% 14.6% 6.7% NOV-2003
VOLATILITY 10.1% 15.0%
SHARPE RATIO 1.0 0.5
RETAIL HEDGE
ANNUALISED RETURN 13.8% 11.3% 7.0% NOV-2006
VOLATILITY 8.2% 14.9%
SHARPE RATIO 0.8 0.3
OCCASIO
ANNUALISED RETURN 15.2% 11.2% 6.6% MAY-2009
STANDARD DEVIATION 10.3% 13.8%
SHARPE RATIO 0.8 0.3
Contact information:
• Craig French or Vulani Mampane
• Telephone: 010 020 6263 or
011 245 8900
• Email: info@visiofund.co.za
• Website: www.visiofund.co.za
52
The information above has been produced by Visio Fund Management (Pty) Ltd. Past performance is no guarantee of future returns, values can go up and down. Investments employing the
strategies described in this document are by nature speculative and may be volatile and therefore should only be considered by experienced and sophisticated investors. This material is not
intended to be a prospectus and does not constitute an offering of investment fund shares. For additional information please request the prospectus and supplementary documentation. Visio
Fund Management (Pty) Ltd is a licensed Financial Services Provider (FSP no. 49566) with the Financial Sector Conduct Authority (FSCA).

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2025 HEDGE FUND GUIDE - PROFILE
AIP Capital Management
AIP Capital Management was
founded in August 2017. In 2020,
the business was restructured
to become a transformed entity
and in the same year a black strategic
partnership was formed with Lwazi Koyana.
In September 2021, Yonela Makwetu, our
CIO, joined the business and in October
2024, the AIP RCIS Long-Short Qualified
hedge fund was nominated for Best New
Fund by HedgeNews Africa Awards. AIP has
an AUM of R920-million, with 30 clients
on their books. It is led by Makwetu (CIO),
Zeenat Patel (COO) and Johan Henn (CEO).
It’s all in the philosophy
AIP focuses on niche and esoteric
opportunities, targeting underexplored and
misunderstood investment opportunities.
Uncorrelated returns seek diversification
across instruments, execution strategies,
geographies, sectors, asset classes and
liquidity profiles, utilising leverage where
appropriate. Agile and asymmetric returns
adapt quickly to market shifts, capitalising
on both stable and volatile conditions.
Alternative edge leverages inefficiencies
created by passive investing and the
widespread availability of information to
uncover alternative sources of return. AIP
provides an alternative source of return
uncorrelated to traditional financial market
returns, which assists financial planners to
optimise their clients’ return/risk solution.
Process, process, process
AIP focuses on active trading investment
solutions that are developed in line with
product-specific mandates and which
capitalise on market inefficiencies at any
point in time. The undertone to this is
an investment team with more than 100
years of combined trading and investment
experience. AIP has a dedicated business
development team that is responsible for
ongoing communication and servicing of
financial intermediaries.
Performance is key
Given hedge funds’ superior risk/return
characteristics and volatility experienced in
traditional capital markets, our hedge funds
have shown a strong outperformance to
their relevant benchmarks.
Contact information:
• Johan Henn
• Telephone: 082 8811 647
• Email: info@aip.co.za /
investing@aip.co.za
• Website: www.aip.co.za
The official publication of the
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2025 HEDGE FUND GUIDE - MANAGER LISTING
Hedge fund manager and fund listing (A-Z)
This list of hedge fund managers and hedge funds has been supplied by the companies
featured. It does not claim to be an exhaustive list but rather gives an indication of the
range of businesses offering hedge funds.
AG Capital www.agcapital.co.za
AG Capital is the specialised Hedge Fund arm of the Anchor Group,
offering best-of-breed multi-strategy and single-strategy Retail Hedge
Funds, across a variety of Linked Investment Service Providers (LISPS),
giving investors a risk-efficient alternative to traditional long-only equity
funds. AG Capital is a licensed financial services provider (FSP No. 43325).
Hedge funds
• AG Capital Rainbow FR Retail Hedge Fund
• AG Capital Fusion Worldwide FR Retail Fund of Hedge Funds
• AG Capital Opportunity FR Retail Hedge Fund
• AG Capital European Trends FR Retail Hedge Fund
• AG Capital Variable FR Retail Hedge Fund
• AG Capital Worldwide Macro FR Retail Hedge Fund
• Renegade Capital Global Macro Segregated Portfolio (S65 approved
Cayman-domiciled fund)
AIP Capital Management www.aip.co.za
AIP Capital Management is a niche alternative asset manager chasing
opportunity where others don’t. We deliver standout, risk-adjusted
returns through innovative strategies across hedge funds, private equity
and private credit. Run by a transformed team, we’re here to break
convention and unlock exceptional value for our investors.
Hedge funds
• AIP NCIS Concentrated Arbitrage Qualified Hedge Fund (conservative,
market-neutral equity arbitrage fund)
• AIP RCIS Multi-Strategy Retail Hedge Fund (diversified long-term hedge
strategy for retail investors)
• AIP RCIS Concentrated Growth Qualified Hedge Fund (concentrated
exposure across growth-oriented strategies)
• AIP RCIS Equity Long Short Qualified Hedge Fund (Long/Short strategy
with concentrated equity positions)
• AIP Senior Living Private Equity Fund (targeted senior living PE
investment with consistent returns)
Alexforbes Investments
www.alexforbes.com/za/en/global/home-global.html
Alexforbes Investments, established in 1997, is South Africa’s largest
multi-manager and a top provider of investment solutions. It
serves corporates, individuals and advisors with services including
investment administration, advisory, individual and discretionary
investments, and alternative assets, focusing on tailored, client-centric
financial strategies and needs.
Hedge funds
• AF Invest Stable QI HFoF
• AF Invest Performance QI HFoF (Winner: Ten-year performance, Fund
of Funds)
• AF Invest Moderate QI HFoF
• AF Invest Focus QI HFoF
Amplify Investment Partners www.amplify.co.za
Amplify Investment Partners actively pursues financial success and
enduring positive change. We empower investors with Intelligent
Impact, delivered through proactive, expert fund management
that delivers real results. With R62-billion AUM since 2018, we
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demonstrate that financial success fuels meaningful change, contributing
to conservation and impactful SDG initiatives.
Hedge funds
• Amplify SCI Real Income Retail Hedge Fund
• Amplify SCI Diversified Income Retail Hedge Fund
• Amplify SCI Absolute Income Retail Hedge Fund
• Amplify SCI Stable Income Retail Hedge Fund
• Amplify SCI Income Plus Retail Hedge Fund
• Amplify SCI Enhanced Equity Retail Hedge Fund
• Amplify SCI Property Retail Hedge Fund
• Amplify SCI Managed Equity Retail Hedge Fund
• Amplify SCI Active Equity Retail Hedge Fund
Anchor Capital www.anchorcapital.co.za
Anchor offers two award-winning, daily-traded Retail Hedge Funds
(RHFs) that have proven their worth in the market. The Anchor Stable
RHF (launched in July 2003) has a strong and consistent track record,
backed by deep investment expertise and robust risk management.
The Anchor Accelerator RHF (launched in March 2016) has also been
successful, targeting higher return potential through a dynamic strategy.
Hedge funds
• Anchor Stable FR Retail Hedge Fund
• Anchor Accelerator FR Retail Hedge Fund
Aylett Fund Managers www.aylett.co.za
The Aylett Prescient QI Hedge Fund is a high-conviction, long-only fund
designed to give our portfolio manager the flexibility to fully express
investment views without constraints. Our multi-strategy approach
blends asset allocation, stock selection, opportunistic trading and
selective use of derivatives to optimise returns. Leverage is used
sparingly, as our focus remains on fundamental, research-driven
decisions that stack the odds in favour of investors.
Hedge funds
• Aylett Prescient QI Hedge Fund
Bateleur Capital www.bateleurcapital.com
Bateleur Capital is a boutique, independent and owner-managed
fund manager based in Cape Town that was founded in 2004. Bateleur
Capital’s award-winning funds have developed lengthy track records
of consistent real returns within conservative risk parameters. Bateleur
Capital prides itself on its consistent and meticulous investment
approach, combining fundamental analysis with a top-down macrooverlay,
and leverages its hedge fund background to deliver competitive
returns while placing a strong emphasis on capital preservation.
Hedge funds
• Bateleur Long Short Prescient RI Hedge Fund
• Bateleur Market Neutral Prescient RI Hedge Fund
• Bateleur Special Opportunities Prescient RI Hedge Fund
Blue Quadrant Capital Management
www.blueqcm.com
Blue Quadrant Capital Management manages R1-billion in hedge
and long-only equities in South Africa and global markets. Our core
investment philosophy can be described as “Macrovalue”, which

2025 HEDGE FUND GUIDE - MANAGER LISTING
combines a traditional value approach to allocating capital with
macroeconomic or industry thematic analysis. This approach allows
us to identify companies that are not only undervalued relative to
their estimated intrinsic value but also stand to benefit from an
expected favourable shift in macroeconomic or industry fundamentals.
Blue Quadrant Capital Management has consistently won or been
nominated for HedgeNews Africa awards in each of the past four years.
Hedge funds
• Blue Quadrant Capital Growth Prescient RI Fund (monthly dealing)
Catalyst Fund Managers www.catalyst.co.za
Catalyst Fund Managers specialises in managing listed real estate
investments for institutional and retail clients. Since 2001, we've focused
on delivering alpha-driven results through a dedicated team of real
estate specialists. We believe in real estate’s unique ability to diversify
portfolios and enhance risk-adjusted returns.
Hedge funds
• Amplify SCI Property Retail Hedge Fund (we are the underlying fund
manager)
• Catalyst Alpha Global Real Estate Fund (Section 65 approved)
• Catalyst Alpha QI Prescient Hedge Fund
Corion Capital www.corion.co.za
Corion is a boutique asset manager with a proven track record since 2001.
Our skilled team combines proprietary tools with rigorous qualitative
and quantitative analysis. Backed by robust risk management, we
challenge convention through innovative strategies, agile reporting and
engaging client service – all guided by simplicity, agility and engagement.
Hedge funds
• Corion Absolute FR RIHF
• Corion Multi-Strategy FR RIHF
• Corion Prosperitas FR RIHF
Coronation Fund Managers
www.coronation.com
Coronation Fund Managers is an independent listed investment
manager based in Cape Town, South Africa. We are an active
manager driven by a single long-term, valuation-driven philosophy
with a clear and simple purpose: to deliver superior long-term
investment outperformance for the benefit of all stakeholders. Our
fully integrated global capability covers equities, bonds, property,
hedge funds and cash across developed and emerging markets.
Hedge funds
• Coronation Granite Hedge Fund
• Coronation Multi-Strategy Arbitrage Hedge Fund
• Coronation Presidio Hedge Fund
Cuthman Capital www.cuthman.com
Cuthman Capital is an independent and owner-managed investment
manager. Dedicated to managing a focused mandate, we protect
and grow wealth over the long term by investing in opportunities
worldwide. Our flexible mandate allows us to find the best ideas
globally and exploit market opportunities for ourselves and our
client partners.
Hedge funds
• Cuthman SDR Prescient QI Hedge Fund
Differential Capital www.differential.co.za
Differential Capital is a South African investment firm specialising
in AI-driven asset management. It offers hedge funds and equity
investments, aiming for superior risk-adjusted returns. With a strong ESG
focus, it integrates data science and technology with fundamental analysis
to identify unique opportunities that traditional methods might overlook.
Hedge funds
• Gradient Hedge Fund (QIHF) (multi-strategy hedge fund)
• SA Equity Fund (Neural) (high-conviction long-only strategy)
• Special Situations Hedge Fund (event-driven, activist investing)
• Kyrios Global Equity Fund (AI-enhanced global owner-managed
equity strategy)
• AMC Access (structured retail exposure via AMC 015 and 016)
Edify Fund Managers www.edifyinvest.co.za
Edify Fund Managers is an independent, owner-managed DFM based in
Paarl. We provide tailored investment solutions, from model portfolios
to bespoke investment consulting. Leveraging technology, boutique
fund managers and alternative investments, we aim to deliver superior
risk-adjusted returns while prioritising exceptional client service. Our
expertise in hedge funds and global investments sets us apart.
Specialist hedge fund-only model portfolios/wrap funds
• Edify Defensive Hedge
• Edify Growth Hedge
Enko Capital www.enkocapital.com
Established in 2008, Enko Capital is an African-focused asset
management firm managing debt, private debt, equity and private
equity investments across Africa. The firm manages over $1-billion
across its strategies. Enko offers a deep knowledge of the continent
combined with best-in-class investment expertise. Enko seeks to
deliver strong risk-adjusted absolute returns for its investors.
Hedge funds
• Enko Africa Debt Fund
Fairtree www.fairtree.com
Fairtree is an investment manager that manages alternative and longonly
investment portfolios across global asset classes for local and
offshore clients. Headquartered in South Africa, Fairtree manages
award-winning diverse global portfolios. Fairtree continually strives
for investment excellence and to deliver competitive returns while
pursuing its mission of enriching the lives of all stakeholders.
Hedge funds
• Fairtree Assegai Equity Long Short FR QIHF
• Fairtree Equity Market Neutral FR QIHF
• Fairtree Silver Oak Equity Long Short FR RIHF
• Fairtree Fixed Income FR RIHF
• Fairtree Proton RCIS RIHF
• Fairtree Worldwide Multi-Strategy Flexible FR QIHF
• Fairtree Wild Fig Multi-Strategy FR QIHF
• Fairtree Woodland Multi-Strategy FR QIHF
• Fairtree Worldwide Multi-Strategy Flexible FR RIHF
• Fairtree Wild Fig Multi-Strategy FR RIHF
• Fairtree Assegai Segregated Portfolio USD
• Fairtree Wild Fig Multi-Strategy USD Segregated Portfolio
Laurium Capital www.lauriumcapital.com
Laurium Capital is an employee-owned boutique asset manager
with offices in South Africa and London. Founded in 2008, Laurium has
grown to over R60-billion in AUM and provides a suite of longonly
and hedge fund strategies which invest in South Africa, across
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2025 HEDGE FUND GUIDE - MANAGER LISTING
Hedge fund manager and fund listing (A-Z)
Africa and globally. We manage a niche range of unit trusts across the
risk spectrum, accessible on most LISPs.
Hedge funds (available on most LISPS)
• Laurium Market Neutral Prescient RI Hedge Fund
• Laurium Long Short Prescient RI Hedge Fund
• Laurium Enhanced Growth Prescient RI Hedge Feeder Fund
• Laurium Enhanced Growth Hedge Fund
• Laurium Aggressive Long Short Prescient QI Hedge Fund
Matrix Fund Managers
www.matrixfundmanagers.co.za
Matrix Fund Managers is an owner-managed, diversified asset
manager. We take an agile approach to active investing that benefits
from our independent thinking and unconstrained style. Our core
purpose is to deliver consistent return and high-quality service for our
institutional and retail clients.
Hedge funds
Matrix offers two CISCA-regulated retail hedge funds (RHFs),
complemented by a range of traditional unit trusts:
• Matrix SCI Fixed Income RHF (focused on institutional investors)
• Amplify SCI Income Plus RHF (in partnership with Amplify Investment
Partners – retail ready and available on most LISPs)
Mazi Asset Management www.mazi.co.za
Mazi Asset Management, one of South Africa’s pioneering blackowned
fund managers, is built on the belief that diversity drives
performance. We embrace diverse perspectives, skills and backgrounds
across our team and investment approach. This commitment extends
to our growing, diversified portfolio – spanning domestic and global
equities, multi-asset solutions, fixed income and alternatives.
Hedge funds
• Mazi Market Neutral Hedge Fund
• Mazi Long Short Qualified Investor Hedge Fund
• Mazi Next-Gen Long Short Retail Investor Hedge Fund
MitonOptimal www.mitonoptimal.co.za
Established in 2000, MitonOptimal is an independent, ownermanaged
Discretionary Fund Manager committed to delivering
high-quality investment solutions and support to financial advisors.
As part of our comprehensive offering, the MitonOptimal Core
ASTUTE Range features dedicated hedge fund portfolios, providing
advisors with two expertly constructed options to seamlessly
integrate into their clients’ overall investment strategies.
Hedge fund model portfolios
• MitonOptimal Core ASTUTE Guarded Portfolio
• MitonOptimal Core ASTUTE Bold Portfolio
Ninety One www.ninetyone.com
Ninety One is an active, global investment manager managing
R3.1-trillion in assets (as at 31 March 2025). Our goal is to provide longterm
investment returns for our clients while making a positive
difference to people and the planet. The Ninety One Equity Long-
Short Hedge Fund is an actively managed domestic long-short equity
hedge fund. It has a unique earnings-focused investment approach
backed by a large research team and experienced portfolio manager.
Hedge funds
• Ninety One Equity Long Short Hedge Fund
Novare Holdings www.novare.com
Novare is an investment solutions provider with operations across
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the African continent. Our solutions range from Real Estate Funds,
Impact Investing Funds, Multi Managed Funds and Implemented
Investment Consulting across a range of asset classes. We generate
positive returns and create long-term value for our investors while positively
impacting the communities in which we invest and operate.
Hedge funds
• Novare Mayibentshsa Market Neutral – low to medium risk
• Novare Mayibentsha Moderate – moderate risk
• Novare Mayibentsha Focused – aggressive risk
Obsidian Capital www.obsidiancapital.co.za
Obsidian Capital was founded in 2007 by Richard Simpson and Royce
Long. Prior to Obsidian, Richard and Royce spent 14 years together at RMB
Asset Management. Obsidian is a boutique manager with fundamental
company analysis at its core combined with a deep understanding of the
investment cycle. The investment philosophy is to “marry valuation with
the cycle”. Obsidian has a credible, long-term track record.
Hedge funds
• Obsidian SCI Multi Asset Retail Hedge Fund
• Obsidian SCI Long Short Retail Hedge Fund
Peregrine Capital ww.peregrine.co.za
Peregrine Capital is South Africa’s longest-running hedge fund
manager, delivering superior risk-adjusted returns since 1998. With a
disciplined research approach and flat structure, we focus on long-term
wealth creation for our clients. Our flagship funds have consistently
outperformed, making us a trusted and respected investment partner.
Hedge funds
• Peregrine Capital High Growth QI Hedge Fund
• Peregrine Capital High Growth H4 Retail Hedge Fund
• Peregrine Capital Pure Hedge QI Hedge Fund
• Peregrine Capital Pure Hedge H4 Retail Hedge Fund
• Peregrine Capital Dynamic Alpha QI Hedge Fund
• Peregrine Capital High Growth Offshore Segregated Portfolio
• Peregrine Capital Dynamic Alpha Offshore Segregated Portfolio
Protea Capital Management
www.proteacapitalmanagement.com
Protea Capital Management is an investment management firm
domiciled in South Africa, investing globally. The firm follows a
proprietary ”quantamental” investment approach, combining traditional
fundamental analysis with quantitative investment techniques. Assets
under management across four long/short equity hedge funds as at
mid-2025 are approximately R1-billion. We manage your money like we
do our own.
Hedge funds
• Protea South Africa FR Retail Hedge Fund
• Protea Global FR Retail Hedge Fund
• Protea Worldwide Flexible FR QI Hedge Fund
• Protea International Hedge Fund SICAV Plc
Rozendal Partners www.rozendal.com
Rozendal Partners is an independently owned asset management
firm, committed to compounding capital over long periods while
carefully managing risk. The firm employs a disciplined, valuationbased
investment process to identify compelling local and global
opportunities, predominantly in equity markets. The firm strives to create
an environment where rational investment decision-making can prevail
even in challenging times.

2025 HEDGE FUND GUIDE - MANAGER LISTING
Hedge funds
• Rozendal Worldwide Flexible Prescient QI Hedge Fund
Senqu Capital www.senqucapital.com
Senqu Capital was established with the objective of generating
superior returns for our investors over the medium to long term. We
manage a single hedge fund strategy that expresses our very best ideas at
any given point in time, and we invest directly alongside you in this fund.
We aim to attract partners who believe in our investment process, have a
long investment time horizon and who are unlikely to redeem capital in
times of market panic. We focus on the quality of our investor base and
recognise how this benefits all our investors collectively. We recognise that
trust is earned and endeavour to communicate with partners in a manner
that is transparent in order to continuously enhance your confidence in
our process. Historic success is a function of yesterday’s decisions, but
continued future performance relies on superior insights about tomorrow.
By applying our investment philosophy unfailingly every day, we will
deliver on our objective of generating superior returns for our investors.
Hedge funds
• Senqu Worldwide Flexible Long Short Prescient RI Hedge Fund
SouthernCross Capital
www.southerncrosscapital.co.za
SouthernCross Capital is a boutique asset management firm offering
alternative investment products, particularly hedge funds, and emphasises
a unique, progressive investment approach. The team relies on deep
analytical insights, active trading and advanced technology for decisionmaking.
By maintaining a small, agile structure, they offer personalised
client engagement and custom investment solutions. They prioritise
long-term success and investor alignment, with a track record of strong
performance and industry recognition.
Hedge funds
• SouthernCross Multi Strategy Prescient RIHF
• SouthernCross NCIS Market Neutral RHF
Steen Capital Partners www.steencap.com
We buy outstanding companies when they trade cheaply and hold for a
long time. Sometimes we influence management outcomes. Our process
is strict, and most companies fail to make our list. When they do, we act
with conviction, meaning our portfolio is more concentrated than most
others. Concentrated, fundamental, long-only.
Hedge funds
• Steen Partners High Equity Prescient QI Hedge Fund
Steyn Capital Management
www.steyncapitalmanagement.com
Steyn Capital Management manages R15-billion in hedge and longonly
equities in South Africa, Africa, and frontier and emerging markets.
We utilise unique investment research techniques in order to create an
investment edge and generate superior returns. Steyn Capital has won or
been nominated for HedgeNews Africa awards in 11 out of the 16 years
since inception.
Hedge funds
• Steyn Capital Daily Liquidity FR Retail Hedge Fund (available on all
major LISPS)
• Steyn Capital FR QI Hedge Fund
• Steyn Capital FR Retail Hedge Fund (monthly dealing)
Terebinth Capital www.terebinthcapital.com
Terebinth Capital is an independent, female-led, diverse boutique
investment manager with a mission to generate leading risk-adjusted
returns with a focus on growth, sustainability and consistency. We are a
knowledge and research-focused solution for clients looking for longterm,
sustainable growth. Founded in 2013, Terebinth is a 100% managerowned
company.
Hedge funds
• Terebinth Capital Fixed Income Macro FR Retail Hedge Fund
THINK.CAPITAL Investment Management
www.thinkcapital.co.za
Established in 2014, THINK.CAPITAL is an independent boutique asset
manager dedicated to delivering innovative alternative investment
solutions. With a focus on hedge fund strategies, the firm has consistently
demonstrated its value through the award-winning performance of its
pioneering funds. THINK.CAPITAL’s investment philosophy is rooted in the
belief that selection matters. The hedge fund universe exhibits a persistently
wide dispersion of returns and a strong rotation in the performance
rankings of individual funds and styles. In such an environment, the cost
of poor selection is significant – while the rewards of skilful manager and
strategy rotation are substantial. THINK.CAPITAL brings deep expertise in
navigating this complexity, leveraging its robust portfolio construction and
rotation capabilities to capture opportunities and mitigate risk. The firm
provides independent, specialist advice in a highly specific segment of the
investment universe. Its solutions are designed to complement traditional
portfolios, offering reliable, uncorrelated return streams that enhance
overall diversification and long-term performance. With a proven track
record, a disciplined investment process and a sharp focus on delivering
differentiated value, THINK.CAPITAL is a trusted partner for investors seeking
high-conviction alternative strategies.
Hedge funds
• THINK Flexible Growth RCIS Retail Hedge Fund (available on all major LISPS)
• RCIS THINK Growth QI Hedge Fund (monthly dealing)
Visio www.visiofund.co.za
Visio is an investment management firm founded in June 2003 by Patrice
Moyal as a hedge fund manager. Based primarily in Johannesburg and Cape
Town, Visio manages a diversified suite of strategies across hedge funds,
equities, multi-asset, global and fixed income on behalf of local and offshore
institutional and retail clients.
Hedge funds
Qualified Investor Hedge Funds (pricing and dealing monthly):
• Visio FR Golden Hind Qualified Investor Hedge Fund
• Visio FR Occasio Qualified Investor Hedge Fund
Retail Investor Hedge Funds (pricing and dealing daily):
• Visio FR Retail Hedge Fund
X-Chequer Fund Management
www.xfm.co.za
X-Chequer Fund Management is a boutique alternative investment house
founded in 2006. We specialise in hedge fund and long-only offerings
with a Market Neutral Hedge Fund Strategy focus. Our aim is to provide
superior risk-adjusted returns to our investors over the medium term, while
focusing on capital protection on a continuous basis. Our disciplined focus
on risk management helps us to navigate the volatile financial markets.
Hedge funds
• X-Chequer Market Neutral FR RIHF
• X-Chequer Duo Multi Strategy FR RIHF
• X-Chequer Diplo FR QIHF