About Us

We started providing financial advice in 1983 and acquired our fund management license in 1995, when we began acting as DFAs (Discretionary Financial Advisors), managing the investments of our clients via wrap funds. However, funds under management had grown to such an extent by 2005 that we were able to transition the wrap funds to funds of funds.

As mentioned elsewhere, we foresaw the potential for the 2008 Credit Crunch Crash. After this, we decided, it necessary to acquire the Category IIA hedge fund management license, in addition to our Category II fund management license, as an alternative method of risk management to address the perceived uncertainties by the 2008 Credit Crunch crash.

2.1 Financial Advisors Regulated in Terms of the FAIS Act

In complying with the FAIS Act (Financial Advisory and Intermediary Services), Kanaan Trust is required to bring certain information concerning its business entity and its employees to your attention. Previously, financial advisors were not regulated like lawyers, doctors, and auditors have been. For example, a doctor must at least have an M.B.Ch.B degree, with the necessary experience, and must be registered at the Medical and Dental Council of South Africa. Financial Advisors are now also required to be licensed, and there are thus three aspects concerning themselves that they are supposed to explain to you, namely:

2.1.1 The academic qualifications of our Key Individuals

2.1.2 Their experience concerning the products they give advice on.

2.1.3 Whether they are licensed to give advice on these products.

2.2 Our Key Individuals, Analysts, Representatives and Compliance Officer are:

Andre Delport (Chairman/Fund manager/ Financial Advisor)

B.Iuris (UP) degree, with a minimum of 5 years fund management experience and a Category IIA license (which includes the Category I and II licenses).  With fund management experience since 1995.

Gert Delport (CEO/ Financial Manager/ Fund Manager /Analyst/Financial Advisor)

B.Com (Fin) degree and studying towards his CFA (Charted Financial Analyst) with a minimum of 5 years fund management experience and a Category IIA license (which includes the Category I and II licenses).

Andries van Tonder (Analyst/Financial Advisor/ Compliance Officer)

B.Sc (Chemical Engineering) degree and studying towards his actuarial degree, has 3 years fund management experience and a Category I license, which also reflects on the website of the FSCA (Financial Sector Conduct Authority). He has also completed his Post Graduate Diploma in Financial Planning at the University of the Free State in 2017.

Johannes Delport (Administrator)

IT Diploma

Jennifer Delport

B.Com (Econ) degree.

2.3 Approved Financial Service Provider

Kanaan Asset Managers is an approved financial service provider (FSP 528) and has a license to advise, with intermediaries to deliver the service according to the following categories.

Category I: Long-Term Insurance Category C, Retail Pension Benefits, Participatory Interests in Collective Investment Schemes. Also acts as an IFA (Independent Financial Adviser). Independent Financial Advisor fees on investments under management fluctuate between 0.5% to 1% per year and are usually more expensive than FAs (Financial Advisors) whose fees are limited by the institution for which they work, such as Old Mutual, Sanlam, Nedbank, etc.

Category II: Long-term insurance Categories B and C, retail pension benefits, pension fund benefits, money market instruments, participatory interests in collective investment schemes. Also acts as a DFA (Discretionary Financial Adviser). Although financial advisors like Kanaan Asset Managers, which act as DFAs, need to have the same minimum qualifications and licenses as the fund managers of institutions such as Old Mutual, Sanlam, and banks, they usually do not have the same experience and training in terms of buying and selling shares. Therefore, we do not manage share portfolios on behalf of clients but manage portfolios of investments in terms of funds of funds and wrap funds, taking into consideration the clients' risk profiles and circumstances, with an emphasis on risk management.

Category IIA: Hedge Funds FSP (Financial Service Provider). Also acts as a DIM (Discretionary Investment Manager).

A copy of the license detailing the financial services for which Kanaan is authorized, as well as any exemptions, is available upon request. Kanaan also acts under its Category II license as a fund manager, which allows it to purchase shares and unit trusts through its own funds, namely Equities Offshore via the Administrator in Mauritius and Stable SA, Equities SA, and Global SA via the Administrator Glacier of Sanlam in South Africa, acting as a Discretionary Financial Advisor (DFA). In the case of our Category II A license, we act as a DFA with reference to our Kanaan Hedge Fund of Funds and our Stable SA Hedge Fund, via our administrator IAL in Mauritius.

2.4 Check that Your Financial Advisor Has the Right Qualifications

It is important that you, as an investor, find out whether a financial advisor, who approached you or whom you approached, has the necessary academic qualifications, experience, and license to give the applicable advice to invest in, or withdraw from, a unit trust or hedge fund investment.

2.5 Visit the Financial Sector Conduct Authority (FSCA) Website

You can check whether the applicable FSP (Financial Services Provider) has the necessary CAT I, CAT II, or CAT IIA license by visiting https://www.fsca.co.za/Pages/Default.aspx and clicking on:

2.5.1 Regulated Entities

2.5.2 List of Regulated Entities and Persons - FAIS

2.5.3 Financial Service Provider (FSP)

2.5.4 FSP Number, or FSP name (and example. Type: Kanaan Trust)

2.5.5 Submit

2.5.6 Details

2.5.7 Contact Details

2.5.8 Click on “Key Individual”, scroll down to products and click on it. At this stage you will see the products for which the specific key individual is licenced.

2.5.9 Products

If you have visited the FSCA website, as mentioned above, you would have seen that the products are categorized into categories and subcategories. Category one means that the applicable key individual and their marketers can market the respective product. Category two implies that the applicable key individual can market and manage the respective product. For instance, in the case of pension funds and collective investment schemes (Unit Trusts), the applicable key individual and their personnel can manage Funds of Funds. They are authorized to make necessary changes, buy and sell the underlying funds, and switch to cash without obtaining the client's permission. We act here as a Discretionary Financial Adviser (DFA). The Category II license has been very important to us since we established our funds in 1995. It afforded us the opportunity to switch to cash two weeks before the Far East Pacific share market crash, timely before the IT bubble crash in 2000, and promptly during the 2008 Credit Crunch crash. However, we do not guarantee that we will always switch promptly. After the 2008 Credit Crunch Crash, we decided not to try to time the markets anymore. Instead, we have chosen to follow the industry guideline of Buy and Hold and to diversify our clients' investments according to their risk profiles and circumstances amongst our three categories of risk fund of funds. These are Stable SA, Equities SA, and Global SA, along with three similar USD denominated funds which we manage via our Administrator IAL in Mauritius.

Lastly, you will notice on the FSCA website CAT IIA for Hedge Funds. If you do not see CAT IIA under the name of the applicable key person, it means that the applicable key individual is not allowed to manage Hedge Funds.

Members of the public are, of course, allowed to invest in any one of the mentioned products regulated in South Africa, as well as in offshore investments not regulated in South Africa but regulated offshore, if they feel they have the necessary qualifications, time, experience, and confidence to invest directly and manage these investments themselves. They will then not have to pay a financial advisory fee, between 0.5% and 1% per annum.

2.6 Product Suppliers

Where clients and prospective clients have accepted this letter of introduction/disclosures and allowed Kanaan Asset Managers to do an analysis of their immediate, intermediate, and retirement capital requirements, Kanaan may accordingly advise various investments and/or financial security products via the following institutions, in terms of its service level agreement with these institutions.

2.6.1 Absa Investment Management Services

2.6.2 Boutique Collective Investments

2.6.3 Momentum Life, Momentum Wealth

2.6.4 Old Mutual

2.6.5 Sanlam/Glacier

2.6.6 Investec

2.6.7 PSG Asset Management

2.6.8 Metropolitan Life

2.6.9 International Assurance Ltd

2.7 Indemnity Cover

Kanaan Trust holds adequate professional indemnity insurance through Coleman Insurance Brokers CC.

2.8 Compliance

Compliance with the FAIS Act is monitored by Michael Denenga, an external compliance practice and compliance officer approved by the Financial Services Board. His email address is mdenenga@corporatecounsel.co.za.

2.9 Client Confidentiality

Kanaan Trust wishes to advise that all information obtained or acquired about you shall remain confidential unless you provide Kanaan Trust with written consent, or unless Kanaan Trust is required by law to disclose such information.

2.10 Complaints

If you are dissatisfied with any aspect of Kanaan Trust’s service, you should address your complaint in writing to us at secretary@kanaantrust.com. A copy of Kanaan Trust’s Complaints Resolution Policy is available upon request.

2.11 Fees

2.11.1 Comprehensive Financial Advice

For comprehensive financial advice, Kanaan charges 1% per annum, levied monthly in arrears from the units of the investments clients make through Kanaan Asset Managers or managed by Kanaan Asset Managers. Where Kanaan Asset Managers process applications for life cover and disability cover on behalf of the client, Kanaan Asset Managers receives commission according to the prescribed commissions payable by the relevant company. Kanaan receives 5% upfront commission on investments made, which is negotiable. Kanaan Asset Managers does not receive income for services rendered and does not invoice clients for financial advice in terms of the following:

The below-mentioned advice includes, but is not limited to:

• Immediate Capital Planning
• Intermediate Capital Planning
• Retirement Capital Planning
• Income Tax Planning
• Estate Duty Planning
• Family Trust Will
• Rebalancing of investment portfolios
• Advice concerning small business management and strategic planning
• Active Fund Management
• Passive Fund Management

2.11.2 Possible Conflicts of Interest

As DFAs, unlike FAs, are authorized to act in accordance with their mandate on behalf of their clients, they can decide to switch some or all of their growth funds to cash, or conversely, switch all of the client's cash to growth funds under certain perceived market conditions. We found it more cost-efficient to set up our own fund and fund of funds in terms of Stable conservative funds, an Equity fund which is a more moderate growth fund, and a high growth fund. Into these, we diversify the investments of all our clients according to their risk profiles and circumstances.

This can create a possible conflict of interest, and it can therefore be said that we are not independent financial advisors in the true sense of the word, where we advise our clients to rather invest in our three funds of funds mentioned.

Of course, we argue that we acquired the various underlying funds of our funds of funds/wrap funds, independently from any influence, merely based on our research, in terms of what we believe is best suited for our various wrap funds and funds of funds, namely:

We manage our funds of funds/wrap funds through our segregated mandate for active or passive management, depending on the needs of the client.

11.1.2.1 Stable SA

11.1.2.2 Equities SA

11.1.2.3 Global SA

11.1.2.4 Compulsory SA

11.1.2.5 Stable Offshore

11.1.2.6 Equity Offshore

11.1.2.7 Moriah Global

2.12 Limited Financial Advice/ Passive Management

Clients who prefer Kanaan’s financial advice and services to be limited to the processing of predetermined investments and/or financial security products, where the client’s risk and investment portfolio will not be actively managed by Kanaan Asset Managers, should note that Kanaan will still receive commissions from life offices relevant to the applicable life and disability products purchased. However, in the case of investments, Kanaan will charge fees as stipulated in the table below.

The maximum upfront commission is 5% of the investment amount before units are allocated.

2.13 DFA/IFA Fees

	TYPE OF FUND	DFA/ ONGOING FEE	PERFORMANCE DRIVEN FEE (PDF)	IFA/ ONGOING FEE	INITIAL FEE
2.13.1	Moriah Global FoF Equity Offshore FoF(Active Management)	1.6% (Exc. Vat)	15% of performance above the previous high-water mark monthly in arrears.	0% (Exc. Vat)	5% (Exc. Vat)
2.13.3	Stable Offshore FoF (Passive Management)	0.8% (Exc. Vat)	20% of performance above 6% per annum according to the high-water mark principle monthly in arrears.	0% (Exc. Vat)	5% (Exc. Vat)
2.13.4	Equity SA Global SA Compulsory SA (Active management)	0.6% (Exc. Vat)	15% (Exc. Vat) of performance above (Inflation + 3%) according to the high-water mark principle yearly in arrears.	1% (Exc. Vat)	5% (Exc. Vat)
2.13.5	Stable SA (Passive Management)	0.3% (Exc. Vat)	0%	0.5% (Exc. Vat)	5% (Exc. Vat)

• DFA (Discretionary Financial Advisor)
• FA (Financial Advisor)
• PDF (Performance Driven Fee)

These above-mentioned fees are also disclosed on the fact sheets of our various funds under "funds."

2.14 Distribution/Rebates

No distribution fees or rebates will be paid to entities or independent financial advisers promoting our funds to encourage them to invest in our funds. Financial advisers are expected to invest in our funds because of their performances and their risk profiles, which might suit the needs of some of their clients.

2.15 Additional Fees

Fees may be levied if the client requests a new or enhanced service that is not contemplated by the current fee structure.

Performance, not profits, is what is important to us.

3.1  Grateful for what we have been able to do:

We aim to bring talented people together and to harness their skills and expertise.

3.2  To be innovative:

Our aim is to create something entirely new in the corporate world. We continually strive to be imaginative and innovative.

3.3  To make a difference in the lives of employees:

Our firm belief is that the people who work for us are our biggest asset. Unity is strength, and therefore we aim towards a united force where each one feels they belong to a large family and feel secure in that partnership.

3.4  To be a good leader:

Building competent leadership qualities is high on our list of priorities. Outstanding leaders in any field have always been those who can listen well – not those who speak too much and thereby tend to impose their views on their personnel and also on outsiders. When they do speak, their words are always meaningful, engaging the opposition in healthy debate.

3.5  Integrity:

We are always transparent. We will always answer all our clients' questions and tell them like it is. There is no investment black box that the client does not understand.

3.6  Aligning Interests:

Most of the personnel have invested their own funds in the same portfolios that are offered to our clients in general.

3.7  Passion:

We are passionate about our business and its investments. We are intellectually curious and therefore also widely read.

3.8  Flexibility:

We manage our business flexibly. In other words, we adapt to changing circumstances continually in the same manner as we manage our funds. Kanaan will close any fund under management if there is a possibility that the fund may become too big or inflexible in the foreseeable future.

3.9  Temperament:

The personnel management of Kanaan, when recruiting asset managers or analysts, is more interested in the right temperament for investments. The right temperament is one that allows a good manager to think differently and not to be influenced by the crowd. Having the ability to think differently also means that our underlying managers can withstand the stress of underperforming and stick to our investment philosophy. A study of 163 large cap equity managers in the US whose annual returns over a ten year period, placed them among the top 25% of managers in that category, shows that during that period, 97% of them had at least one three-year period where their returns placed them among the bottom 50% and 77% of them had at least one three-year period during which their returns placed them among the bottom 25% of managers.

3.10  Flexible conviction:

We tend to have a high level of conviction and this is usually reflected in a low number of funds in our portfolios. We take bigger bets on fewer funds. While we are independent and often contrarian thinkers, we can also change our views if the evidence changes. We are looking for resilience, not stubbornness.

3.11  Long term focus:

We tend to have a long term focus and do not speculate on the short term. We understand the need to have patience and wait for the value of a sector or a fund to be unlocked. Doing less often results in earning more.

3.12  Stewardship:

We launch and manage only a few funds. We have never launched funds that target the latest fad and we do not focus on short term returns. We are stewards of our funds and are the opposite of salespersons, who are simply selling products. Performance, not profits, is what ultimately drives us.

3.13 Ethics:

At Kanaan Trust, we have implemented the Code of Ethics as outlined by the CFA (Chartered Financial Analyst) Institute. We aim to maintain high standards of education, integrity, and professional excellence. For in-depth information regarding this high standard, please either download our Code of Ethics or contact us to send it to you.