Kevin Shames from Alpha Asset Management explains why the international community is finding the SA hedge fund industry so attractive.
Chris Gibbons:
It is time to look at hedge funds in South Africa. Big profit opportunities in South African stocks, likely to double the amount of money managed by hedge funds, focussing on this fast growing economy and that is the view of Kevin Shames, he is a director at Alpha Asset Management.
He was speaking in Cannes in France and that is where we find him this very evening. Kevin good evening to you and welcome to the ‘World at Six’, once again. Your view of hedge funds going forward, and the relationship with South Africa, why suddenly are we so attractive?
Kevin Shames:
Good evening Chris. Well I think first of all, it is not suddenly, the hedge fund industry in South Africa really started going in 1998, we have grown very substantially since then, I guess mainly through very solid returns with low risk and the hedge fund industry now is, there is about 100 funds in South Africa managing R17-billion.
So it is becoming a significant industry. It is up about 150 percent in the last year and a half. Up 36 percent this year to date and it has become a very attractive investment opportunity for domestic pension funds as well as high net worth individuals. What we are starting to see is quite a lot of international interest in the South African hedge fund industry and that is one of the reasons I am over here, is that the hedge fund industry internationally, has been delivering fairly pedestrian returns, in the region of about six to seven percent in dollars and South African hedge funds are returning about 19 to 20 percent in dollars. And as a result of that, the international investors are starting to look at South Africa as a very attractive investment opportunity.
