Kanaan Asset
Managers |
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Comprehensive
regulation of Hedge Funds |
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April
2014 |
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I have mentioned
in a previous Newsletter that the FSB intends to regulate South African Hedge
Funds more comprehensively, similar to that of unit
trusts. |
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Unfortunately,
as mentioned previously, the FSB follows the widely held perception that hedge
funds are for the rich man’s club only. It is true that most individual hedge
funds do not have the necessary administration to cater for small investments
and their minimums investment are usually R1m or even
more. |
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The new
regulations on fund of hedge funds, which will most likely come into effect
before the end of this year, makes the minimum investment, even in a fund of
hedge funds, R1m. Luckily existing clients who made initial investments lower
than this will be allowed to continue with their current investments and as
there is no restrictions on top ups it would not be a problem for them to make
top ups as small as R10 000. |
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Hedge funds,
which form part of the alternative asset class, which do not correlate with the
other main asset classes, are important in any well-balanced, properly
diversified investment portfolio. |
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We advise
clients who want to make withdrawals from the hedge fund, to leave at least
R100 000 in the account so as to keep their account open. Within a few months
from now, you will have to invest at least R1m if you do not
have an existing account with a hedge fund manager. |
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Andre
Delport |