Peregrine Capital navigates investing in a volatile new world order

As South Africa’s longest-running hedge fund manager, Peregrine Capital has been safeguarding and growing client wealth since 1998.

In 2025, the investment team drew fully on this experience to navigate an exceptionally volatile global environment shaped by profound geopolitical shifts and rapid technological change.

2025 marked a decisive turning point in global geopolitics, likely signalling the formal end of the post–Cold War era that has shaped markets and international relations for more than three decades. Under President Donald Trump, the US shifted away from its traditional role as a defender of the existing global order towards a more unilateral, America-first stance.

This transition was reflected in a more adversarial approach to global trade, withdrawals from international institutions, increased geopolitical assertiveness, rising defence spending, and tighter immigration policies. These developments unsettled markets and contributed to a more fragmented global landscape.

Global markets came under pressure early in the year after the US introduced punitive tariffs, triggering sharp volatility across risk assets. As markets rapidly repriced risk, investor sentiment deteriorated sharply.

Protecting client capital
“Periods of market stress are precisely when disciplined risk management matters most,” explains Jacques Conradie, CEO of Peregrine Capital. “Our tried-and-tested approach once again proved its value. Following in-depth analysis, the investment team implemented downside protection through short-term put options on the US market, effectively insuring portfolios against declines. This strategy helped limit drawdowns during the sharp sell-off that followed the so-called ‘Liberation Day’ tariff announcements.”

Opportunities created by volatility
While volatility posed risks, it also created opportunities. Peregrine Capital selectively increased exposure to high-quality companies, particularly in the US, where the sell-off was most pronounced. Artificial intelligence (AI) remained a core investment theme for the funds.

“We remain very optimistic about the long-term impact of AI,” says Conradie. “However, we remain mindful that capital expenditure across the sector has accelerated rapidly, and revenues and earnings will need to catch up over time. We continue to assess carefully where spending may be running ahead of near-term returns.”

Delivering on the mandate
Against this backdrop, Peregrine Capital’s flagship funds once again delivered on their mandates. The High Growth Fund and Pure Hedge Fund delivered net returns of 14.67% and 10.6%, respectively.

“During the year, the High Growth Fund crossed the 200-times money* threshold since inception, and Pure Hedge crossed the 100-times money** threshold since inception, underscoring the power of long-term compounding,” says Conradie. “Our mandate is clear: to compound capital consistently over time while avoiding major drawdowns. The performance delivered in 2025 reflects this.”

Peregrine Capital also launched the Peregrine Capital Vision Fund, a US dollar–denominated fund designed for investors seeking exposure to the firm’s highest-conviction global ideas.
“The Vision Fund allows us to take more concentrated positions, accepting higher volatility in pursuit of long-term return potential,” Conradie explains.

The Vision Fund delivered a 28.96% net return in 2025, benefiting from exposure to select global technology and innovation-driven investments.

2026 investment outlook
Looking ahead, Peregrine Capital expects global volatility to persist as geopolitical tensions, fiscal imbalances, and structural economic changes continue to unfold.

“In this environment, assets that can act as ‘stores of value’ are becoming increasingly important and are another investment theme we are taking seriously,” says Conradie.

Strong performance in gold and platinum-group metals has supported South Africa’s economy. The firm sees scope to increase exposure selectively, particularly in mining and resource companies where fundamentals remain attractive.

“These tailwinds in commodity prices should support fiscal revenues and create policy flexibility, potentially allowing for further interest-rate cuts into 2026, which we believe will add growth locally. The positive outlook for South Africa’s economy is our final investment theme we cover,” Conradie adds.

Globally, Peregrine Capital continues to own a portfolio of growing businesses at reasonable valuations, while maintaining a cautious stance towards the US amid expanding fiscal deficits.

“Our team remains invested alongside our clients and is collectively the largest investor in our funds. This alignment of interests is central to how we manage capital and remains a defining feature of Peregrine Capital,” Conradie concludes.