Sun, Nov 23, 2014
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications

Opalesque Roundtable: The forgotten lesson from 2008

Sign up here for our free Roundtable Scripts - get this unique intelligence by email as Opalesque publishes them:

When I traveled to Cape Town to conduct this Roundtable, I also spent all day at a cap intro event where the South African prime broker Peregrine Securities presented South African hedge funds to local and some international investors. On such a day you can meet eight or ten managers, and they all have five year plus track records annualising net 15-20% or more. People come and take a look at those managers, and for the right reasons.

While it is impossible to say whether we are at a market high or a market low, but we can look at the scenery and determine if we are in the neighbourhood of a high or of a bottom. Hedge funds follow diverse strategies, and many have very good hedging and shorting skills, so they might become more relevant in the next couple of years as the place to be, relative to the recent history where long-only was a better place to be. And indeed, South African hedge fund managers are now getting approached by managers who were historically allocating primarily to long only managers.

A change of perception - the forgotten lesson from 2008

The hedge fund space a unique skill-based world where some very skilled fund managers actually do better than the markets. That means investors don't lose something by investing in hedge funds, but actually mitigate risk and improve return over the long term. However, the general perception seems to be that investors have to give up a huge amount of return when they invest into hedge funds. But, at the same time, investors should also be concerned about lowering their risk. Hedge funds offer protective mechanisms, but only for those who are not too greedy. With the skill-based world of hedge funds, investors can do much more than the market over the long term, and also benefit from the risk mitigation that is inherent in many strategies.

Institutions, not only in South Africa, tend to be behind the curve and reactive. In a rampant bull market, they are looking at hedge fund exposure and say, “well, it’s not yielding what my long exposure is giving me, there must be something wrong with that…” This issue really comes down to institutions needing to understand that many hedge funds strategies, particularly within the equity space, aim to provide protection in down markets. That means they will often not be able to offer 100% to the upside. There are hedge funds that can outperform even a rampant market, but then downside protection may not be their focus.

In 2008, many hedge funds did what they were supposed to do and helped protect on the downside. But, the dip (and the rebound) was so quick that the long-only managers overtook in terms of returns again within a 12-month period. So, many investors never really got to see or experience the full benefit of that downside protection, because the recovery was so sharp and quick. This could be one factor why hedge funds are still underrepresented in many institutional and high net worth portfolios. If we would have had a bit more volatility or the downturn had been a bit longer, this could have solved the case of hedge funds a lot quicker.

The 2014 Opalesque South Africa Roundtable was sponsored by IDS and Eurex and took place end of 2013 in Cape Town with:

  1. Andy Pfaff, Commodities Fund Manager, MitonOptimal Group
  2. Andre Steyn, Founder and Portfolio Manager, Steyn Capital Management
  3. Claire Rentzke, Head of Manager Research, 27four Investment Managers
  4. Devon Olander, Analyst, Skybound Capital
  5. Ian Hamilton, Founder, IDS Group
  6. James Gilfillan, Chief Investment Strategist, Alpha Wealth
The group also discussed:
  • Investing in Africa: There is significant interest for Africa. Driven by their clients - mainly European single and multifamily offices - some of the very large asset consultants have all been over the continent looking at some of the local managers. With 1,200 listed stocks, Africa offers investors a lot of idiosyncratic opportunities and market inefficiencies. There are approximately 100 Africa-focused funds, many of them managed from outside Africa.
    • Investment process when investing in Africa ex-South Africa
    • Perceived and actual investment risk: why company specific risk is more important than political risk
    • How can investors evaluate corporate governance in Africa?
    • What are Africa’s new top investment destinations?
    • Can Africa funds run an absolute return mandate?
    • Update on the growing African debt market; liquidity and idiosyncratic trading rules at African stock exchanges
  • Opportunities in Commodities
  • New regulations: South African pensions can now invest 10% in hedge funds and up to up to 30% in international equities
  • How new platforms provide access to African and South African fund managers.

Access the Opalesque Roundtable Series - South Africa 2014 | Download here

The Opalesque Roundtable Series offers unparalleled intelligence on the most important global hedge fund jurisdictions and their players. The Roundtable Series is a free publication from Opalesque and is continually updated. Please scroll down to view the full selection of our Roundtables - covering the globe!

Article Link

Other Opalesque Roundtables in South Africa
Wed, 05 Dec 2012
Opalesque Roundtable Series - South Africa 2013 More informationDownload
Fri, 09 Dec 2011
Opalesque Roundtable Series - South Africa 2012 More informationDownload
Tue, 14 Dec 2010
Opalesque Roundtable Series - South Africa 2011 More informationDownload
Sat, 09 Jan 2010
Opalesque Roundtable Series - South Africa 2010 More informationDownload
Fri, 05 Dec 2008
Opalesque Roundtable Series - South Africa 2008 More informationDownload
Opalesque Roundtable Series - A Catalogue of Intelligence on Global Hedge Fund Centers:
Thu, 20 Nov 2014
Opalesque Roundtable Series - Gulf (Dubai) 2014 More informationDownload
Tue, 04 Nov 2014
Opalesque Roundtable Series - Gibraltar More informationDownload
Tue, 28 Oct 2014
Opalesque Roundtable Series - Russia 2014 More informationDownload
Mon, 20 Oct 2014
Opalesque Roundtable Series - Luxembourg More informationDownload
Wed, 08 Oct 2014
Opalesque Roundtable Series - Netherlands 2014 More informationDownload
Wed, 01 Oct 2014
Opalesque Roundtable Series - U.K. 2014 More informationDownload
Thu, 03 Jul 2014
Opalesque Roundtable Series - France 2014 More informationDownload
Fri, 27 Jun 2014
Opalesque Roundtable Series - Frankfurt 2014 More informationDownload
Wed, 14 May 2014
Opalesque Roundtable Series - Malta 2014 More informationDownload
Fri, 07 Mar 2014
Opalesque Roundtable Series - Cayman 2014 More informationDownload
Wed, 05 Feb 2014
Opalesque Roundtable Series - Geneva 2014 More informationDownload
Wed, 22 Jan 2014
Opalesque Roundtable Series - Zurich 2014 More informationDownload
Tue, 07 Jan 2014
Opalesque Roundtable Series - Miami 2014
Opalesque Roundtable Series - Miami 2014 (Spanish version)
Opalesque Roundtable Series - Miami 2014 (Portuguese version)
More information
Tue, 17 Dec 2013
Opalesque Roundtable Series - Brazil 2013 More informationDownload
Mon, 09 Dec 2013
Opalesque Roundtable Series - New York 2013 More informationDownload
Mon, 18 Nov 2013
Opalesque 2013 Chicago Roundtable More informationDownload
Thu, 07 Nov 2013
Opalesque 2013 HARD ASSETS Roundtable More informationDownload
Wed, 16 Oct 2013
Opalesque Roundtable Series - Nordic Region 2013 More informationDownload
Mon, 05 Aug 2013
Opalesque Roundtable Series - Connecticut 2013 More informationDownload
Tue, 16 Jul 2013
Opalesque Roundtable Series - Frankfurt 2013 More informationDownload
Wed, 10 Jul 2013
Opalesque Roundtable Series - France 2013 More informationDownload
Tue, 02 Jul 2013
Opalesque Roundtable Series - Gulf (Abu Dhabi) 2013 More informationDownload
Mon, 24 Jun 2013
Opalesque Roundtable Series - U.K. 2013 More informationDownload
Mon, 17 Jun 2013
Opalesque Roundtable Series - West Coast 2013 More informationDownload
Wed, 12 Jun 2013
Opalesque Roundtable Series - Australia 2013 More informationDownload
Thu, 30 May 2013
Opalesque Roundtable Series - Hong Kong 2013 More informationDownload
Mon, 20 May 2013
Opalesque Roundtable Series - Japan 2013 More informationDownload
Tue, 14 May 2013
Opalesque Roundtable Series - Singapore 2013 More informationDownload
Wed, 13 Mar 2013
Opalesque Roundtable Series - Netherlands 2013 More informationDownload
Mon, 21 Jan 2013
Opalesque Roundtable Series - Florida 2013 More informationDownload
Mon, 14 Jan 2013
Opalesque Roundtable Series - Cayman 2013 More informationDownload
Mon, 17 Dec 2012
Opalesque Roundtable Series - Geneva 2013 More informationDownload
Mon, 26 Nov 2012
Opalesque Roundtable Series - Zurich 2012 More informationDownload
Thu, 01 Nov 2012
Opalesque Roundtable Series - Managed Futures 2012 More informationDownload
Tue, 23 Oct 2012
Opalesque Roundtable Series - New York 2012 More informationDownload
Tue, 16 Oct 2012
Opalesque Roundtable Series - Connecticut 2012 More informationDownload
Tue, 02 Oct 2012
Opalesque Roundtable Series - Canada 2012 More informationDownload
Mon, 24 Sep 2012
Opalesque Roundtable Series - Nordic Region 2012 More informationDownload
Wed, 25 Jul 2012
Opalesque Roundtable Series - U.K. 2012 More informationDownload
Tue, 17 Jul 2012
Opalesque Roundtable Series - Monaco 2012 More informationDownload
Thu, 05 Jul 2012
Opalesque Roundtable Series - Frankfurt 2012 More informationDownload
Thu, 14 Jun 2012
Opalesque Roundtable Series - Japan 2012 More informationDownload
Thu, 07 Jun 2012
Opalesque Roundtable Series - Hong Kong 2012 More informationDownload
Wed, 30 May 2012
Opalesque Roundtable Series - Singapore 2012 More informationDownload
Wed, 23 May 2012
Opalesque Roundtable Series - Australia 2012 More informationDownload
Thu, 10 May 2012
Opalesque Roundtable Series - Gulf (Abu Dhabi) 2012 More informationDownload
Thu, 03 May 2012
Opalesque Roundtable Series - France 2012 More informationDownload
Wed, 04 Apr 2012
Opalesque Roundtable Series - Brazil 2012 More informationDownload
Thu, 12 Jan 2012
Opalesque Roundtable Series - Geneva 2012 More informationDownload
Wed, 21 Dec 2011
Opalesque Roundtable Series - Pfäffikon 2012 More informationDownload
Thu, 24 Nov 2011
Opalesque Roundtable Series - Netherlands 2011 More informationDownload
Mon, 14 Nov 2011
Opalesque Roundtable Series - Texas 2011 More informationDownload
Mon, 07 Nov 2011
Opalesque Roundtable Series - Boston 2011 More informationDownload
Mon, 31 Oct 2011
Opalesque Roundtable Series - Cayman 2011 More informationDownload
Mon, 24 Oct 2011
Opalesque Roundtable Series - Connecticut 2011 More informationDownload
Thu, 06 Oct 2011
Opalesque Roundtable Series - New York 2011 More informationDownload
Wed, 10 Aug 2011
Opalesque Roundtable Series - France 2011 More informationDownload
Mon, 01 Aug 2011
Opalesque Roundtable Series - U.K. 2011 More informationDownload
Mon, 25 Jul 2011
Opalesque Roundtable Series - Austria 2011 More informationDownload
Wed, 29 Jun 2011
Opalesque Roundtable Series - Frankfurt 2011 More informationDownload
Thu, 19 May 2011
Opalesque Roundtable Hong Kong 2011 More informationDownload
Mon, 02 May 2011
Opalesque Roundtable Series - Singapore 2011 More informationDownload
Tue, 26 Apr 2011
Opalesque Roundtable Series - Australia 2011 More informationDownload
Sun, 10 Apr 2011
Opalesque Roundtable Series - New Zealand 2011 More informationDownload
Sun, 03 Apr 2011
Opalesque Roundtable Series - West Coast 2011 More informationDownload
Fri, 25 Mar 2011
Opalesque Roundtable Series - Colorado 2011 More informationDownload
Thu, 20 Jan 2011
Opalesque Roundtable Series - Geneva 2010 More informationDownload
Sun, 19 Dec 2010
Opalesque Roundtable Series - Malta 2011 More informationDownload
Fri, 03 Dec 2010
Opalesque Roundtable Series - Connecticut 2010 More informationDownload
Thu, 18 Nov 2010
Opalesque Roundtable Series - New York 2010 More informationDownload
Tue, 09 Nov 2010
Opalesque Roundtable Series - Singapore 2010 More informationDownload
Thu, 04 Nov 2010
Opalesque Roundtable Series - Cayman 2010 More informationDownload
Mon, 25 Oct 2010
Opalesque Roundtable Series - Hong Kong 2010 More informationDownload
Mon, 04 Oct 2010
Opalesque Roundtable Series - Zurich 2010 More informationDownload
Tue, 20 Jul 2010
Opalesque Roundtable Series - U.K. 2010 More informationDownload
Wed, 16 Jun 2010
Opalesque Roundtable Series - Florida More informationDownload
Sun, 06 Jun 2010
Opalesque Roundtable Series - Boston 2010 More informationDownload
Mon, 24 May 2010
Opalesque Roundtable Series - West Coast 2010 More informationDownload
Sat, 08 May 2010
Opalesque Roundtable Series - Texas 2010 More informationDownload
Wed, 28 Apr 2010
Opalesque Roundtable Series - Brazil 2010 More informationDownload
Mon, 29 Mar 2010
Opalesque Roundtable Series - New Zealand 2010 More informationDownload
Thu, 18 Mar 2010
Opalesque Roundtable Series - Australia 2010 More informationDownload
Thu, 04 Mar 2010
Opalesque Roundtable Series - Japan 2010 More informationDownload
Tue, 15 Dec 2009
Opalesque Roundtable Series - France 2009 More informationDownload
Mon, 30 Nov 2009
Opalesque Roundtable Series - Geneva 2009 More informationDownload
Tue, 17 Nov 2009
Opalesque Managed Futures Roundtable - Chicago 2009 More informationDownload
Mon, 09 Nov 2009
Opalesque Roundtable Series - Canada 2009 More informationDownload
Mon, 19 Oct 2009
Opalesque Roundtable Series - Connecticut 2009 More informationDownload
Mon, 05 Oct 2009
Opalesque 2009 - U.K Roundtable 2009 More informationDownload
Fri, 26 Jun 2009
Opalesque Roundtable Series - New York 2009 More informationDownload
Tue, 09 Jun 2009
Opalesque Roundtable Series - Cayman 2009 More informationDownload
Fri, 29 May 2009
Opalesque Roundtable Series - Japan 2009 More informationDownload
Thu, 21 May 2009
Opalesque Roundtable Series - U.S. West Coast 2009 More informationDownload
Wed, 13 May 2009
Opalesque Roundtable Series - Hong Kong 2009 More informationDownload
Fri, 24 Apr 2009
Opalesque Roundtable Series - Singapore 2009 More informationDownload
Thu, 19 Mar 2009
Opalesque Roundtable Series - Zurich 2009 More informationDownload
Mon, 17 Nov 2008
Opalesque Roundtable Series - Brazil 2008 More informationDownload
Fri, 07 Nov 2008
Opalesque Roundtable Series - Russia 2008 More informationDownload
Mon, 20 Oct 2008
Opalesque Roundtable Series - Nordic Region 2008 More informationDownload
Wed, 01 Oct 2008
Opalesque Roundtable Series - Geneva 2008 More informationDownload
Wed, 02 Jul 2008
Opalesque Roundtable Series - London 2008 More informationDownload
Wed, 11 Jun 2008
Opalesque Roundtable Series - New York 2008 More informationDownload
Fri, 23 May 2008
Opalesque Roundtable Series - Japan 2008 More informationDownload
Tue, 20 May 2008
Opalesque Roundtable Series - Hong Kong - Mandarin (Chinese) language More informationDownload
Wed, 30 Apr 2008
Opalesque Roundtable Series - Hong Kong 2008 More informationDownload
Wed, 23 Apr 2008
Opalesque Roundtable Series - Singapore 2008 More informationDownload
Tue, 25 Mar 2008
Opalesque Roundtable Series - Australia 2008 More informationDownload
Mon, 17 Mar 2008
Opalesque Roundtable Series - New Zealand 2008 More informationDownload
Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing


  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. Greenlight Re CEO says hedge fund reinsurance strategy buzz is validating[more]

    From Artemis.bm: The attention being paid to the hedge fund reinsurance business model and the fact that others are now looking to leverage bits of it within their own strategies, is validating for reinsurer Greenlight Capital Re, according to CEO Bart Hedges. There has been an increasing buzz

  2. Legal - Hedge fund manager fights £8m tax tribunal ruling[more]

    From FT.com: A hedge fund manager who may have to repay £8m in tax is trying to overturn a tribunal ruling that found he had attempted to shelter millions in an avoidance scheme. Patrick Degorce, chief investment officer at Theleme Partners, lost a tax tribunal case last year. HM Revenue & Customs c

  3. Europe - Hedge funds face exit tax as Iceland central bank discusses plan[more]

    From Bloomberg.com: Hedge funds and other creditors with claims against Iceland’s failed banks face an exit tax as the island looks for ways to unwind capital controls without hurting the economy. The government targets having a plan it can present by year-end that would map out how Iceland will sca

  4. Investing - George Soros puts $500m of his money on Bill Gross, Soros, Paulson backed Hispania Activos mulls Realia takeover, Ex-Credit Suisse trader’s hedge fund sees yen shorts as crowded, Hedge hunters double default-swaps as views split, Large hedge fund positions come under pressure, Vikram Pandit's fund picks 50% stake in JM Financial's realty lending arm for $87m[more]

    George Soros puts $500m of his money on Bill Gross From WSJ.com: Before Bill Gross was fully settled in at his new firm, Janus Capital Group Inc., he received an unlikely visit from the chief investment officer of famed investor George Soros ’s firm, according to a person familiar with t

  5. Hedge fund Oceanwood raises $2bn, to close to new investors[more]

    From Reuters.com: Europe-focused hedge fund Oceanwood Capital Management is closing its fund to new investors after its assets under management hit $2 billion (1 billion pounds) recently, a source with direct knowledge of the matter said. Oceanwood, a multi-strategy hedge fund spinout from Tudor Gro