Mayibentsha Fund of funds wins hedge fund performance award

Otshepeng Sokhela (Investment Analyst, Novare), Eugene Visagie (Risk Manager, Novare) with the trophy won by Mayibentsha Focused Fund of Hedge Funds in the Long-Term Performance ? Fund of Funds category at the HedgeNews Africa Awards.

Novare Investments’ Mayibentsha Focused Fund of Funds won the long-term award, judged over three years, at the recent HedgeNews Africa Awards 2011 that recognise excellence in hedge fund investment performance.

The Mayibentsha Focused Fund of Hedge Funds won the Long-Term Performance – Fund of Funds category with a 12.63% annualised return on a Sharpe of 1.74*. The annual awards, based on data compiled by HedgeNews Africa, recognise the best risk-adjusted returns of alternative investment funds in South Africa and in Africa.

South African hedge fund managers outperformed their global peers by some margin in 2011, gaining 8.79% (according to data compiled by HedgeNews Africa) against a decline of 1.9% in the HedgeFund Intelligence Global Composite. Hedge funds also fared better than the general market, with the JSE’s All Share Index gaining just 2.57% during the year on a total return basis. The Mayibentsha Focused Fund of Funds returned a net +10.6% for 2011.

The Mayibentsha Focused Fund of Funds is part of a suite of funds of hedge funds portfolios that target different CPI+ objectives across the risk/return spectrum. It was launched in December 2008 and targets both the institutional as well as retail market and currently has R490m in assets under management. The investment philosophy followed for the Focused fund is to invest in a concentrated portfolio of uncorrelated local hedge funds. The Focused fund targets CPI+4.5% a year, with volatility of returns lower than that of the FTSE/JSE All Share index.

Novare Investments has been managing funds of hedge funds since April 2003 and currently manages R4.8bn across different funds of hedge funds and multi-manager (long only) products.

Funds of hedge funds are well suited to pension funds looking to take up an investment in alternatives, especially following recent regulatory developments that clarified the extent to which pension funds may invest in hedge funds.

Carla de Waal, Head of Fund of Hedge Funds at Novare Investments, said that changes to the Pension Funds Act meant that hedge funds could be used to a much greater extent as a differentiating source of income in retirement funds.

“These awards clearly demonstrate the ability of South African hedge funds to add value to clients’ overall portfolios by delivering superior risk adjusted returns on a sustained basis.

“Funds of funds are intended to simplify hedge fund investment decisions as well as remove the hassle of monitoring managers. We’re very proud of the extent to which our Mayibentsha Focused Fund of Hedge Funds has delivered on these obligations,” said de Waal.