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From the Opalesque team:

During the most recent Opalesque Roundtable (South Africa), the discussion of past and anticipated future hedge fund industry growth in South Africa was positive, however managers expressed frustration at the misplaced assumptions of high-level risk associated with Africa investing.

Prior to the global financial crisis the South African (SA) hedge fund community was seeing growth in foreign investments. However, with the onset of the crisis, investor risk appetite disappeared and for the hedge funds located on a continent viewed as very high risk by outside investors, asset flows dropped off.

However, Michael Tostee, Director for global fund manager Skybound Capital, said assets are already returning to the region. “Since the global markets bottomed in March 2009, we have seen increased appetite for risk and the revival of capital flows. These flows have increasingly arisen from Asian investing and will be a significant force for development in Africa,” he said during the Roundtable discussions.

As such regional re-growth does occur, hedge funds in SA need to prepare. The group agreed managers have to do more to market the industry globally, especially as more pension-friendly UCITS III structures are launched. SA firms also need to ensure that they have proper infrastructures in place in advance that will allow them to accept foreign capita......................

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