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Tony Christien Benedicte Gravrand, Opalesque Geneva for New Managers:

South Africa (SA) has recently updated its regulations for the fund services industry, and some delegates at the recent Opalesque South Africa Roundtable fear that, even if those regulations are very efficient, they might stifle the industry’s entrepreneurial drive. Furthermore, investors still tend to go to the bigger fund houses, and are used to dealing with the long/short equity strategies that fill the local market. But future managers will be forced to differentiate themselves, and so SA should expect to see more exotic strategies coming into the market. Local investors should prepare for that. Some also suggest that smaller managers should set up strategic alliances or partnerships with distribution channels or with other managers in order to grow.

As an administrator, said Tony Christien, Deputy CEO of IDS Fund Services, a specialist Fund Administrator in Cape Town, his firm has always tried to help new managers get started, even with R5m or R10m.

"Now, in spite of all the positive aspects of the regulations," he added, "we do have the concern that we get a situation where it will be almost impossible for the new managers to come to market. And if that does happen, we believe that the hedge fund industry will go to an extent ......................

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