The past 18 months have been unusually busy for SA’s hedge fund industry as it made the transition to the regulated space. The result of this transition is that retail investors can now buy into certain of these funds with similar ease and transparency as they can with unit trusts.
Prior to these changes, hedge funds were largely the domain of institutional investors looking for downside protection in portfolios designed for that purpose. A small number of sophisticated investors with the resources to meet minimum investment thresholds enjoyed the same benefits.
The past 18 months have been unusually busy for SA’s hedge fund industry as it made the transition to the regulated space. The result of this transition is that retail investors can now buy into certain of these funds with similar ease and transparency as they can with unit trusts. Prior to these changes, hedge funds were largely the domain of institutional investors looking for downside protection in portfolios designed for that purpose. A small number of sophisticated investors with the resources to meet minimum investment thresholds enjoyed the same benefits. Even with these changes, designed to introduce powerful investment portfolio diversification for retail investors, assets under management in hedge portfolios remain small. According to figures published at the end of February by the Association for Savings & Investment SA, the hedge fund industry represents less than 1% of SA’s regulated savings and investment pool. This is despite growth in the 2016 calendar year of R5.3bn...
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