The very name "hedge fund" implies that they are a safe haven in choppy markets. At the very least they are expected to have a different series of returns from traditional equity and bond funds: if not, what role do they serve? There was a 10% decline in their assets to R62.3bn in the year to June 2017 — the last official statistics. The fall in the year just past could be even more, perhaps to less than R55bn. There has already been one casualty, Kaizen Asset Management, though this was as much because of internal disagreements as from performance. And this is at a time when the other main alternative asset class, private equity, is R170bn-strong and growing. Sygnia CEO Magda Wierzycka was one of the early adopters of hedge funds, at African Harvest 15 years ago. She is now reducing client exposure to hedge funds substantially. "They have astronomical fees and they have not delivered on the promise of capital preservation," she says. "In a world of single-digit returns and high vol...

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