Competition commission approves Octane’s purchase of Blue Ink Investments

The Competition Commission has approved the acquisition of Blue Ink Investments by Octane Holdings, an offshore specialist alternative investment manager focusing on funds of hedge funds. Octane, which has Sanlam as a major shareholder, announced in September that pending Competition Commission approval it would acquire Blue Ink Investments from its founder, Clifford Warren for an undisclosed sum.

Cape Town-based hedge fund manager, Blue Ink Investments, is now owned by Octane which currently manages in excess of $1.3 billion of offshore assets for mainly institutional clients. Operationally, Blue Ink retains its independence, while synergies between the two entities are expected to be mutually beneficial. Whilst Blue Ink is a leader in the South African market as a provider of funds of hedge funds solutions, Octane contributes global best practice and experience in the institutional market to the relationship, thus enhancing Blue Ink’s South African offering.

Managing Director of Octane, Duncan Theron says the acquisition allows Octane to enter the South African fund of hedge fund market through a well-respected player with an outstanding track-record. “Blue Ink Investments built its reputation as a fund of hedge fund manager in the private client arena, but with increasing institutional interest, they now have a strong local private and institutional client base of over R4billion under management. We aim to entrench Blue Ink’s position as an industry leader by expanding in the institutional market and enhancing the current South African offering with our tailor made global solutions approach to the local hedge fund industry.”

Blue Ink’s institutional product is offered via a joint venture with Legae Capital. Esmarie Strydom, Blue Ink’s Chief Executive, has been appointed to the board of Legae Capital and her extensive industry experience in pension fund asset management and investment consulting is expected to further enhance the institutional product offering.

“Collectively the broader group now manages in excess of R10 billion of fund of hedge fund monies”, adds Theron. “We are now in a position to manage our South African clients’ local and offshore mandates as a consolidated offering, if required. Octane already has the strongest local presence of any offshore investment manager and combined with the material presence of Blue Ink locally, we make a formidable business team with a comprehensive range of alternative investment solutions for our clients.”

Blue Ink’s Esmarie Strydom sees plenty of potential in the local alternative investment solutions environment. “We recently launched the Blue Ink-ubator, a separate legal entity, 100% owned by Blue Ink and headed by Thomas Schlebusch. Blue Ink-ubator’s primary focus is to find new talent by looking for alternative types of strategy, not just start-up funds. This is a formalised process of seeding new hedge fund managers that have passed the criteria of Blue Ink’s investment team.”

“Through this and other innovations, coupled with the access, through Octane, to a wider network of investment professionals and enhanced quantitative risk management systems, we’re looking forward to positioning the business as the pre-eminent provider of South African Funds of Hedge Funds”, adds Strydom.