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Alternative Market Briefing

South African pensions now allowed to invest 10% in hedge funds and up to 30% in international equities

Thursday, January 23, 2014

Komfie Manalo, Opalesque Asia:

South Africa’s market regulator, the Financial Services Board recently extended the limit in of the amount of money pension funds can invest in hedge funds, thus creating more opportunities in the local hedge funds space.

Ian Hamilton, head of a leading hedge fund administrator in Africa, the IDS Group, said during the latest Opalesque South Africa Roundtable that South Africa’s regulations for pension funds, particularly as to how much these institutional investors’ could invest in alternative investment and international equities, had been revised over the last few years.

"Previously, they were extremely restricted and private equity was capped at 2.5% for large institutions. That combination is now up to 10%, so they can be up to 10% in hedge funds," he said.

Claire Rentzke, head of manager research at 27four Investment Managers, added that the changes include that pension funds can now invest an additional 5% over and above their 25% international equity allocations.

She said, "So in total South African pensions can have up to 30% in international equities.

The amendment was welcomed by Andy Pfaff, manager of Cassandra Commodities, a boutique within ......................

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