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Bailey McCann, Opalesque New York:

The latest Novare South African Hedge Fund Survey shows that new regulations which opened the industry to retail investors in the country is likely to have a profound impact on local funds. Current hedge fund assets in South Africa surpass R50 billion, according to the data with the bulk of that being in equity long/short funds.

The South African hedge fund industry also appears to be maturing with over 75% of hedge fund managers having five years or more of experience. The longevity and strong performance of these managers are likely driving the 27% bump in AUM for local managers since this time last year.

A total of eight new funds were launched in South Africa last year, four of which were equity long/short funds. Fixed income funds saw net outflows and also decreased in overall size from 15.7% in 2013 to 11.6% in 2014. The decline is directly attributable to tepid overall performance and a few fund closures in the strategy.

Like large hedge funds in the US economy, the top ten largest funds in South Africa managed 44.1% of the total industry assets. This increased from 42.9% from the previous year. This upward trend has been observed since 2010, according to report data. Just under 40% of total investor inflows were allocated to the ten largest funds.

The report notes that South African managers typically have more than one business line, often running a lon......................

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