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From Sagar Chakraverty, Opalesque Asia:

SA hedge fund industry in 2008 Malungelo Zilimbola, founder of Mazi Capital, a local fund management company managing about 4.6bn Rand ($0.62bn), commented at the recent Opalesque Roundtable in Cape Town, South Africa (here) that SA Funds had showed decent performance in 2008.

As an important lesson learnt in 2008, Zilimbola views that leverage, along with concentration - in terms of stock concentration or economic factors such as currency or interest rates - are dangerous.

On the liquidity issue, his recommendation to fund managers is: “the solution is to diversify your client base, choosing your clients very carefully. I think it is fair and necessary that clients do due diligence on a fund and ask all sorts of questions. I believe that now the manager must in turn ask questions on their clients’ business models and be able to manage liquidity issues.”

Tony Christien from the hedge fund administrator Investment Data Services, seconds Zilimbola’s views. Tony said that in contrast to what happened with administrators overseas whose assets under administration sank up to 60% in some cases, South African (SA) hedge fund assets, at least those under IDS’s administration, actually climbed up about 7% throughout 2008.

“We did not have any fund blowout in 2008. Given all the liquidity issues, volatility and market disrupti......................

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