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From Kirsten Bischoff, Opalesque New York:

Strong performance and building toward better regulation (without over regulation), are some of the things hedge fund managers point out when making the case for South Africa hedge funds. A country rich in natural resources, it also has a growing population with a very large youth demographic. South Africa has seen an influx of investing (mainly from the East), and managers based outside of South Africa that invest in the region have been able to capitalize on the expected growth and needs of this emerging market, but South Africa-based hedge fund managers have seen limited asset inflows, largely due to the limitations of their size.

"The relatively small size of South African hedge funds turned out to be an obstacle. The investors [met with on a recent cap intro trip to London organized by Investec Securities] were prepared to invest significant amounts in the funds, but due to the relative size of the existing funds, the amounts investable would have increased the size of the funds by multiples," says Norman Au, Head of Prime Broking at Investec Securities, during the Opalesque South Africa Roundtable.

It is a conundrum for the industry as institutional investors are the investors most likely to have the due diligence infrastructures in place that will allow them to gain a level of comfort with South Africa investing. However......................

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