Hedge funds aim to earn a positive return regardless of whether markets are going up or down.Hedge funds fees have come down significantly and the base fee is now half what it used to be.Fear and uncertainty around the Covid-19 pandemic, Russia's invasion of Ukraine and higher inflation and interest rates globally have led to more South African investors including hedge funds in their portfolios, Old Mutual Multi-Managers says.
The regulation of hedge funds under the Collective Investment Schemes Control Act since 2015 has helped individual investors feel more comfortable investing in these kinds of funds, Ngqondoyi says. These funds are also regulated under the act but have no restrictions on gearing or unlisted securities.
The Financial Sector Conduct Authority this month also proposed amending a board notice detailing the securities and asset classes in which non-hedge fund unit trust funds are allowed to invest. If approved these amendments will allow regulation 28-compliant funds to invest in hedge funds up to the 10% level.