South African investors are putting their money into hedge funds – This is why

April 30, 2024
Kim Zietsman

Laurium Capital is a leading South African boutique fund manager that runsseveral world-class hedge funds.

Laurium Capital is a leading South African boutique fund manager, with over R50 billion in assets under management. One of its key offerings is hedge funds, with both South African-based and US dollar-dominated hedge funds available from Laurium Capital.

Learn more about hedge funds with Laurium Capital

Hedge funds are a popular investment choice thanks to their balanced design. They provide positive returns at lower risk levels and have low correlations to traditional portfolios. Hedge funds achieve this by using a range of underlying investment tools, including derivatives, short selling, and leveraging – which enable hedge fund managers to extract positive performance in upward-trending markets while protecting capital during downward-trending markets. This makes a hedge fund an excellent solution for securing and diversifying your portfolio.

Growing Interest Among Investors

Laurium Capital has observed that South African hedge funds are becoming increasingly popular among individual and institutional investors. This trend began in 2015 when a change in regulations opened the market to individual investors.

“In 2015, new regulations allowed for hedge funds to fall under the country’s Collective Investments Schemes Control Act (CISCA) and be formally registered as CIS portfolios with the Financial Services Conduct Authority (FSCA),” said Kim Zietsman, Head of Business Development at Laurium Capital.

South African hedge funds, in particular, have a strong history of downside protection when the markets pull back, as seen in 2008 and 2020. During these tumultuous periods, when the South African equity market suffered, the hedge fund industry preserved investors' capital and even provided returns in certain cases.

Laurium Capital Hedge Funds

Laurium Capital is a leading South African hedge fund manager, providing access to retail and qualified investors. It offers three South African-based retail investor hedge funds (RIHFs), one qualified investor hedge fund (QIHF), and a USD-dominated hedge fund.

RIHFs are open to all investors and are more strictly regulated by the FSCA to provide investors with lower risks, while QIHFs are only available to qualified investors and have a minimum investment of R1 million.

Laurium Capital’s RIHFs include:

  • Laurium Market Neutral Prescient RI Hedge Fund – a conservative-risk fund that has provided an annualised 10.0% return since its inception in 2009 to 30 April 2024.
  • Laurium Long Short Prescient RI Hedge Fund – a moderate-risk fund which has returned 9.9% annually since its inception in 2008 to 30 April 2024.
  • Laurium Enhanced Growth Prescient RI Hedge Feeder Fund – the latest addition to the Laurium suite of funds, launched 1 March 2024. Very similar to the Laurium Aggressive Long Short Prescient QI Hedge Fund in that it will invest primarily in South African equities, but will also include an allocation to select international equities.

Laurium Capital’s QIHF is a more aggressive version of its Long Short Prescient RI Fund:

  • Laurium Aggressive Long Short Prescient QI Hedge Fund – it has offered an impressive 14.3% annualised return since launching on 1 January 2013 to 30 April 2024 in ZAR versus the equity market (Capped SWIX) return of 8.1%, with similar volatility.

The impressive performance of these hedge funds, complemented by their downside protection, is a compelling reason for South Africans to invest with Laurium Capital.

Learn more about hedge funds with Laurium Capital

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