Presented by Laurium Capital

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

 ·23 May 2024

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.

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 investor’s 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 the:

  • 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 Africa 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 in 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.

Performance (net of fees) 30 April 2024:

Laurium Market Neutral Prescient RI Hedge Fund31.9%-10.8%
Laurium Long Prescient Short RI45.8%-24.0%
Laurium Aggressive Long Short Prescient QI Hedge Fund69.8%-33.6%

DISCLAIMER: Laurium Capital (Pty) Ltd is an authorised financial services provider (FSP 34142). 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. There is no guarantee in respect of capital or returns in a portfolio. Performance has been calculated using net NAV to NAV numbers with income reinvested. The performance for each period shown reflects the return for investors who have been fully invested for that period. Individual investor performance may differ as a result of initial fees, the actual investment date, the date of reinvestments and dividend withholding tax. Full performance calculations are available from the manager on request. The investment performance is for illustrative purposes only. The investment performance is calculated by taking the actual initial fees and all ongoing fees into account for the amount shown and income is reinvested on the reinvestment date. Annualised performance shows longer term performance rescaled to a 1-year period. Annualised performance is the average return per year over the period. Actual annual figures are available to the investor on request. Highest and lowest is returns for any 1 year over the period since inception have been shown. NAV is the net asset value represents the assets of a Fund less its liabilities. 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 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. The Laurium Enhanced Growth Hedge Fund is approved under section 65 of CISCA.

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