Hedge funds report sharp rise in assets under management
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THE 2020 Novare South African Hedge Fund Survey (SAHFS) showed that the industry had seen a 16 percent increase in assets under management this year, despite historically unprecedented market volatility.
It was the largest year-on-year increase since 2010. Sixty-three asset managers, who manage over 141 uniquely mandated hedge funds in South Africa, with assets under management (AUM) in excess of R61.5 billion, responded to the survey.
According to the survey, the main contributors to the record increase of AUM in 2020 were good performance, industry flows and dissolved or closed funds, consolidation of assets, launch of new funds, while large asset management firms saw relatively high growth in hedge fund assets.
The performance of the hedge fund industry remained positive across all categories, manager sizes and strategies. Survey data indicated a reasonable and positive net inflow, which was a significant departure from what has been observed over the past few years. Assets valued at R3.5bn were lost by strategies that were dissolved.
Fixed income arbitrage and equity market-neutral funds outperformed other strategies. On average, the hedge fund strategies produced 11.6 percent and 8.4 percent returns over the 12 month-period.