February 2015
Kanaan Fund of Hedge Funds - More Good
News
We have emphasized the importance of diversification on
numerous occasions: Not only in the sub-categories of the main asset classes,
equities, but also amongst all 4 of the important main asset classes, more or
less equally -
1.
Equities
2.
Alternative Assets (Hedge
Funds)
3.
Property
4.
Offshore
Assets
Some of our clients have been “mislead” by financial
advisors, who said that it is illegal to invest in Hedge Funds, or that Hedge
Funds are high-risk investments. I found these remarks quite surprising. The
first thing an IFA should do when he thinks that I client was invested in an
illegal or pyramid scheme, by another IFA, is to immediately check whether the
IFA has the required licence; at least a Cat I, to advise and sell financial
products. Anyone can easily check it on the FSB’s website. Had IFA’s followed
above mentioned procedure they would have noted that not only do we have a Cat I
license to advise and sell products, but we also have a Cat II license, which
authorises us to manage unit trust funds and a Cat IIA license, which further
authorises us to manage Hedge Fund of Funds.
In South Africa, there are more than 14 000 Financial
Advisors, approximately only 300 of these financial advisors have Cat II
licenses, while only approximately 50 have Cat IIA licenses.
The Kanaan Fund of Hedge Funds which we manage, had
another great month. The growth for January was 2.24%, which is in-line with our
higher growth expectations for 2015.
See attached hereto a comparison of the performances of
the 44 Fund of Hedge Funds in South Africa, on pg. 27 of the Hedge News Africa
magazine. You will notice that the Kanaan Fund of Hedge Funds came
3rd over the 3 month period, 2nd of the 6 month period,
3rd over the 12th month period and 4th over the
annualised compound period, since inception, which is 15.93% over a ten year
period.