Stockdale Street, which represents the Oppenheimer family interests’ South African private equity portfolio, has announced a R100m ($6.95m) investment in Senqu Capital, a new South African hedge fund business.
Senqu Capital will be run by ex-Capricorn Capital Group money managers Andrew Crawford and Stephen Carew.
“We’re backing some really good talent here in Stephen and Andrew and we like the hedge fund model because it can play through the economic cycles in a positive way for investors,” Paul Salomon, Partner at Stockdale, told Bloomberg.
“We expect there to be a lot of capital coming into hedge funds because of the regulatory changes,” he said.
The introduction of new rules a year ago for the industry has opened hedge funds up to more investors.
The South African hedge fund industry has more than doubled in size over the past five years, with assets amounting to R69bn at the end of June, according to Novare Group.
Senqu Capital’s CIO Carew said that the new fund seeks to raise R750m ($52.16m) in its first two and a half years.
The fund will invest in an equity long-short strategy starting by December and begin taking more investments in February, he added.
Equity long-short strategies, which account for almost 62% of hedge fund assets, returned 5.8% last year, after gains of 14.7% in 2014, according to Novare.
That compared with a 5.4% total return in the FTSE/JSE Africa All Share Index in 2015 and 3.9% decline in the Bloomberg South Africa Local Sovereign Bond Index. Source: Africa Global Funds