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Bailey McCann, Opalesque New York:

South Africa-based investment advisory firm Novare has released its twelfth annual South African hedge fund survey. The findings cover the whole of the hedge fund industry in South Africa, looking at a range of topics from allocation trends to the impact of regulation.

The survey period covers the 12 months up to June 30, 2015.

According to this year's survey, the hedge fund industry in South Africa has topped R62.0 billion in assets under management (AUM) - an increase of 15% over last year. The vast majority of those assets (71%) are managed by funds with more than R5 billion, replicating a trend seen in the US - that the bulk of the assets go to the largest funds.

Equity Long/Short continues to dominate as the most favored strategy, a position in held in prior reports. The average compound return of the equity long/short strategy over the 12 months was 14.7% whereas the local equity market returned roughly 3.7% over same period.

Fixed Income funds as a strategy cohort also rebounded this year, after contracting in size by 4.1% in 2014. Report data shows that these funds regained 2.5% of total hedge funds’ assets in last 12 months to represent 14.1% of assets.

Through June 30 of this year, 16 new funds have launched in South Africa. The number of launches is notable given what the report calls a "muted" outlook for new strategies over the next five years.

Regulation

South African managers......................

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