Gwyneth Roberts, editor, South AfricaHedge
The South African hedge fund industry enjoyed strong growth
in 2006, with investors seeing the benefit of alternative
strategies after a protracted bull run in the domestic equity
markets. While still very small in a global context, the
industry's assets under management doubled during the year to
more than R19 billion ($2.6 billion) with around 100 hedge
funds in existence. The pipeline looks promising for 2007.
The bulk of the industry's assets under management are
domestically sourced, with local fund of hedge fund companies
playing an active role in seeding new managers to shore up
capacity. While domestic appetite has increased, foreign
investment in local hedge funds is still small although this is
expected to change as local managers take active steps to
create structures attractive to offshore investors.
The lack of hedge fund regulation in South Africa is an
ongoing deterrent. Although the...