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13 April 2017

As far as our Kanaan Hedge FoF’s future prospects is concerned.  As I mentioned previously, of the few hundred hedge funds available in South Africa I think we have some of the best, and I do not hold it against them that they did very bad for the past 15 months, taking Nene gate into account during December 2015, Brexit During 2016 as well as the election of President Trump during 2016.

The election of President Trump is now a given and fund managers can now slowly but surely see his strategy.  In South Africa we should have certainty after 17 April when Zuma will either stay or go.  If he goes the rand will depreciate further, but that is not the end of the world as a good hedge fund manager can pick shares that derive their income from offshore and will benefit hugely by a weaker rand.  If they do not fire Zuma the rand may appreciate again which will benefit certain companies which they can buy as they have been doing for many years.

Here you will see the performance of the underlying funds. You will see Tower has a CAR of 13.01% p/a since inception which is relatively lower than the others but we bought tower because of its low STD of only 9.74 which is a mathematical measurement of its volatility.  Most of the other funds have track records like Steyn capital with a CAR of 18.2% p/a.  Steyn is a fantastic fund with a STD of only 6.74 and a fund which is already capped for new clients but our clients will benefit when Steyn makes a comeback.

Friendly Greetings,

Andre Delport

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