Hedge Funds
A hedge fund is an investment vehicle that pools capital from accredited investors and employs various strategies to earn active returns for its investors. Hedge funds can invest in diverse assets, including equities, bonds, currencies, and commodities.
Hedge funds have access to a broader range of tools that allow them to extract excess returns from the market—tools that are typically unavailable to traditional long-only funds. These include the ability to short sell, use leverage and employ derivatives. By combining these techniques, hedge funds can develop sophisticated strategies to capture returns in ways that traditional funds simply cannot achieve.
Anyone can invest in a Retail Investor Hedge Fund. Regulation 28 permits that a pre-retirement investment may invest up to 10% in hedge funds as an asset class, limited to 2.5% in a single hedge fund. There is no restriction on post-retirement and discretionary investments. Currently tax free savings accounts are not allowed to invest in hedge funds. Hedge fund are available on all major investment
Hedge funds usually follow a "1.5 and 20" structure, where 1.5% of assets under management are charged as a management fee, and 20% of the outperformance above the fund's benchmark is levied as a performance fee.
Each hedge fund’s risk depends on the strategy employed. Hedge funds vary from cautious to aggressive risk profiles. Hedge funds are typically less risky compared to their traditional investment counterparts due to their ability to protect when the market is experiencing drawdowns.
Hedge funds may employ long/short equity, market neutral, event-driven, relative value fixed income, or global macro strategies, among others, depending on the fund’s objectives.
Retail Investor Hedge Funds have the same liquidity as their traditional counterparts. Investors can invest and withdraw money with 24 hour notice.
Hedge funds can offer diversification, active management, and the potential for high returns, especially during volatile market conditions. They also offer investment options outside traditional markets.
No, hedge funds do not guarantee returns, and investors can experience losses, especially if market conditions are unfavourable. Performance depends on the fund’s strategy and the manager’s expertise.
Market Neutral RHF
The SouthernCross NCIS Market Neutral RHF is a hedge fund designed to achieve consistent returns regardless of market direction, focusing on a market-neutral investment strategy to reduce exposure to market volatility.
A market-neutral strategy seeks to limit exposure to the broader market by balancing long and short positions, aiming to generate returns through techniques such as arbitrage and relative value stock selection rather than market trends.
This fund may be suitable for investors looking for stable returns, lower correlation with market indices, and a focus on risk management rather than high returns. The fund is particularly well suited for living annuity investments.
The fund utilises a market-neutral approach, reducing exposure to market movements by balancing investments across long and short positions
This fund typically invests in equities and other instruments that allow for both long and short positions, focusing on securities where the fund identifies opportunities to capitalise on mispricing.
Return distribution depends on the fund’s policy. Typically, hedge funds distribute returns annually or semi-annually, but investors can check the fund’s specifics.his fund distributes income quarterly.
R50,000 lump sum or a R1,000 debit order for direct investment. Platform minimums apply if investing via LISPs.
Investors can invest and withdraw money with 24-hour notice if invested directly. Platform rules apply if invested via LISPs.
Expected returns are aligned with market-neutral goals, offering potentially consistent but moderate returns compared to higher-risk funds. The fund attempts to deliver cash +4% without producing a negative return over any given 3 month period.
The fund levies a 20% performance fee of performance above the benchmark.
Multi Strategy Prescient
This fund utilises multiple investment strategies to achieve its objectives, providing diversification across asset classes and styles to maximise returns and manage risk effectively. The fund has exposure to strategies such as equity market neutral, equity long short, short and medium duration fixed income.
The fund has exposure to strategies such as equity market neutral, equity long short, short and medium duration fixed income.
The fund is aimed at investors looking for diversification across multiple investment strategies, with a focus on achieving consistent returns while managing risk. The fund is appropriate for investors seeking growth over the long term without experiencing equity-like drawdowns.
A multi-strategy approach allows for diversification across asset classes and strategies, which can reduce risk and improve resilience in volatile markets.
By diversifying across strategies and asset classes, the fund aims to reduce exposure to individual market segments, smoothing returns over time. The various strategies can be uncorrelated to one another and thereby reducing the volatility of the overall fund.
R50,000 lump sum or a R1,000 debit order for direct investment. Platform minimums apply if investing via LISPs.
Return distribution depends on the fund’s policy. This fund distributes income bi-annually.
The fund levies a 20% performance fee of performance above the benchmark.
Investors can invest and withdraw money with 24-hour notice if invested directly. Platform rules apply if invested via LISPs.
The fund aims to provide balanced returns through its diversified approach, though results depend on market conditions. The fund attempts to deliver cash+6% over the long term.