DIRECTORY Hedge Fund & Alternative Manager 2020/2021 - HedgeNews Africa

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DIRECTORY Hedge Fund & Alternative Manager 2020/2021 - HedgeNews Africa

Hedge Fund &
Alternative Manager
DIRECTORY 2020/2021
A handbook of leading players in Africa’s
alternative asset management industry
DIRECTORY Hedge Fund & Alternative Manager 2020/2021 - HedgeNews Africa
DIRECTORY Hedge Fund & Alternative Manager 2020/2021 - HedgeNews Africa

Introduction  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 4          AFRICA FUNDS

Regulatory update  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 5                       Coronation Asset Management  .  .  .  .  .  .  .  .  .  .  .  . 46
                                                                                                            Visio Fund Management .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 47

Ashburton Investments . .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 7                           FUNDS OF FUNDS
Greenpoint Capital .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 11                      Alexander Forbes Investments  . .  .  .  .  .  .  .  .  .  .  .  . 50
STANLIB Credit Alternatives .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 15
                                                                                                            Aurum Fund Management  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 51
Westbrooke Alternative Asset Management .  .  . 19
                                                                                                            Edge Capital . .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 55
36ONE Asset Management  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 22
All Weather Capital .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 26                     THINK.CAPITAL .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 56
Visio Fund Management .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 48                               TriAlpha Investment Management .  .  .  .  .  .  .  .  .  .  . 57
Aurum Funds Limited .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 52
RisCura  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 78        MANAGEMENT COMPANIES
Mergence Investment Managers  .  .  .  .  .  .  .  .  .  .  . 86                                            Novare CIS .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 58
A2X  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 89   SANNE Management Company .  .  .  .  .  .  .  .  .  .  .  . 59

                                                                                                            PRIME BROKERS
                                                                                                            Absa . .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 60
Ashburton Investments . .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 6
Chrysalis Capital . .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 10                  AG Capital .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 62
Greenpoint Capital  . .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 11                      Investec Prime Services  . .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 63
STANLIB  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 14           Nedbank CIB  . .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 64
Westbrooke Alternative Asset Management .  .  . 18                                                          Peresec  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 65
HEDGE FUNDS                                                                                                 Rand Merchant Bank .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 67
36ONE Asset Management  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 21                                      Standard Bank .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 68
All Weather Capital .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 25
Barak Fund Management .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 28                                  PROFESSIONAL SERVICES
Blue Quadrant Capital Management .  .  .  .  .  .  .  .  . 29                                               Gael Fund Services . .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 70
Catalyst Fund Managers . .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 30                               JTC Group .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 71
Coronation Asset Management  .  .  .  .  .  .  .  .  .  .  . 31                                             Maitland  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 72
Coronation Asset Management  .  .  .  .  .  .  .  .  .  .  .  . 32
                                                                                                            Mazars .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 73
Coronation Asset Management  .  .  .  .  .  .  .  .  .  .  .  . 33
                                                                                                            Prescient Fund Services .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 74
Fairtree  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 34
Independent Alternatives Investment Managers 35                                                             PwC .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 76
Laurium Capital  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 36                  RisCura  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 77
Mazi Asset Management  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 37                                 RMB .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 81
Nitrogen Fund Managers  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 38                                SANNE . .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 82
Peregrine Capital  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 39
                                                                                                            SS&C Advent .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 83
Polar Star Management .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 40
                                                                                                            Zarclear  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 85
Protea Capital Management .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 42
Southchester Investment Managers .  .  .  .  .  .  .  .  . 43                                               DISCLAIMERS  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 91
Visio Fund Management .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 44
Visio Fund Management .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 45                               DEFINITIONS  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 92
Email: Tel: +27 (0) 43 748 1283 Published by African Financial Media

DISCLAIMER: This publication is for information purposes only. It is not investment advice and any mention of a fund is in no way an offer
to sell or a solicitation to buy the fund. Any information in this publication should not be the basis for an investment decision. FundNews
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funds mentioned in this publication are already regulated, while some are still in process or make use of alternative structures for private
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                                                                                                                          HEDGENEWS AFRICA DIRECTORY 2020/2021 3
DIRECTORY Hedge Fund & Alternative Manager 2020/2021 - HedgeNews Africa
Regulation leads the way

               This year’s HedgeNews Africa Hedge Fund and of higher returns. In addition, some managers
               Alternative Manager Directory, our fifth, showcases are able to offer investors access via segregated
               a comprehensive array of talented managers mandates or private arrangement.
               and companies who are accessing a host of                        So far in 2016, markets have been behaving in
               opportunities across the African markets.                      new and interesting ways, ruffled by economic and
                   From long/short equity funds, fixed income political events, both at home and abroad. It has been
               and commodities mandates to market-neutral a rough environment for active managers, yet it is one
               and pan-Africa long-only strategies, managers that many have navigated sensibly and to good effect.
               operating across these markets apply their specific              While many long/short equity strategies, which
               aptitudes and proven abilities                                                       had a great year in 2015,
               to profit in various ways.                                                           have battled the volatility,
                   Whether they focus on the                                                        numerous individual funds
               quantitative or qualitative,                                                         have continued to do well in
               macro or micro, across a                                                             a changeable environment.
                                                        Hedge Fund &
               range of asset classes, they                                                         Fixed income and multi-
               have identified potential profit         Alternative Manager                         strategy      hedge       funds
               centres, and packaged those              DIRECTORY 2020/2021                         have flourished, as have
               ideas into portfolios designed           A handbook of leading players in Africa’s   market neutral, relative-
                                                        alternative asset management industry
               to be accessible to a range of                                                       value     and     commodities
               different investors.                                                                 strategies,    showing      the
                   It’s a particularly exciting                                                     value of diversifying across
               time       for   hedge      fund                                                     different strategies within an
               managers in South Africa,                                                            alternative asset allocation, to
               with single-manager and                                                              build weatherproof portfolios.
               multi-manager          products                                                      And in the broader African
               now moving into a regulated                                                          space, where conditions
               environment, bringing greater                                                        have been brutal in the listed
               comfort for investors.                                                               markets, skilled managers
                   In this year’s directory you                                                     are constructing portfolios
               will notice fund managers’                                                           that tap into long-term
               alliances with management                                                            themes.
               companies, as required under Collective Investment               How can investors identify talented managers in
               Scheme rules. This is an important addition in an increasingly complex operating and investment
               the regulated environment, as authorities require environment? Research and due diligence are
               additional layers of operational oversight, among ever more critical, and this directory provides
               other stringent requirements.                                  an important starting point for investors on that
                   Regulated hedge funds come in two main journey.
               varieties – retail investor funds (RIFs) or qualified            The following pages offer valuable insights into
               investor funds (QIFs). The first are designed to cater the talented individuals operating in the markets,
               to a wider set of investors – they can be accessed the companies that they operate within, and also
               via smaller monthly contributions rather than big the important infrastructure that supports their
               lump sums, and they have various other mandate endeavours – from administrators and prime
               constraints including lower levels of leverage. QIFs brokers, to lawyers, management companies,
               are very much the same type of product that the accountants and risk advisors.
               industry has always offered – but with greater                   We trust you will find it useful.
               oversight. Designed for sophisticated investors or
               institutions, they can use higher leverage limits and Gwyneth Roberts, editor
               more unconstrained mandates, usually in pursuit HedgeNews Africa

               4 HEDGENEWS AFRICA DIRECTORY 2020/2021
DIRECTORY Hedge Fund & Alternative Manager 2020/2021 - HedgeNews Africa
Hedge funds – navigating the

future global environment

                                                                                                              Hedge fund
When reflecting on 2020, it is easy to get            How do we continue to increase broader
distracted by the pandemic and the continuing         investment and awareness?

impact it has on society and businesses               In 2019 we saw the start of a renewed interest in
globally. But in the midst of any uncertainty lies    hedge fund education from several stakeholders.
opportunity, rebirth and innovation.                  This trend has continued throughout 2020,
                                                      evident in publications such as HedgeNews
A concept of planning                                 Africa, which publishes articles showcasing
With global market turmoil all around us, hedge       management teams and opportunity sets. We
fund investment managers have continued               hope this trend continues and that managers
to be active performers and participants in           initiate more marketing and promoting events to
the investment landscape. Many of these               reach a broader investment audience.
investment portfolios are expecting record
returns this year and with global markets             Board Notice 52, the hedge fund regulations
displaying constant volatility, now is a great time   – possible amendments on the horizon?
for managers to plan their next winning moves.        The Financial Sector Conduct Authority (FSCA)
                                                      has indicated on several occasions the need for
Globally competition is growing                       industry participation to drive learning outcomes
Global lockdowns have driven marketing                and revisions to the current regulations. This
initiatives, conferences and showcase events          exciting initiative should hopefully gain traction
to either virtual platforms or to a complete halt.    in 2021, with needed engagement with its
Already countries are positioning themselves          stakeholders.
and thinking about how to attract cautious
tourists back to their shores. Should managers        Board Notice 90 – CIS traditional fund
not apply the same concept in attracting              investment limits, amendments in
new investors? South Africa’s investment              discussion?
infrastructure, stakeholders and risk metrics         There continues to be interest and engagement
continue to be highly regarded as world-class         to allow Traditional Collective Investment Scheme
and investment opportunities, market players          (CIS) portfolios to invest in regulated hedge
and industry bodies are all very competitive.         funds. With the renewed vigour, will we see
   Foreign funds continued to enter South Africa      amendments to the traditional CIS investment
in 2020 via Section 65 arrangements. Foreign          limits, resulting in investment into hedge funds?
fund forums continue to eye South Africa for
investment opportunities and to showcase their        Thank you to all our stakeholders for their
products and solutions at events. In addition,        ongoing contributions over the past year
many South African managers are looking to            and we implore all to think about how as a
globalise their businesses and product offering,      collective we can continue to grow this industry.
all being led by a desire to innovate.                We look forward to the opportunities and
                                                      challenges, and welcome positive thoughts,
How big is South Africa’s hedge fund (and             innovation and all new entrants to the market.
alternatives) market?                                 We wish everyone good health for the year
Access to reliable statistics continues to be         ahead.
debated. An inordinate amount of effort and
work has been completed over the past year            Hayden Reinders is the chairperson of
by ASISA and its members to collate and make          the Hedge Funds Standing Committee
the data available. The release of the hedge          of the Association for Savings and
fund statistics is imminent and once available        Investment South Africa (ASISA), and is
will contribute to the investment narrative and       head of business development and client
opportunity set.                                      management at Prescient Fund Services.

                                                          HEDGENEWS AFRICA DIRECTORY 2020/2021 5
DIRECTORY Hedge Fund & Alternative Manager 2020/2021 - HedgeNews Africa
Alternative Asset Managers

                             ABOUT ASHBURTON INVESTMENTS
                             Ashburton Investments is FirstRand Group’s
                             investment management business. We place our
                             clients at the centre of our thinking to grow and
                             protect their money.
                             By providing investors with access to more sources
                             of return and a strict focus on managing volatility       Our money market, fixed income and private
                             and risk, we endeavour to generate sustainable risk-      market offering provides investors with the tools
                             adjusted returns for our clients.                         they need to enhance their current portfolio
                                                                                       construction. By investing in a wider range of assets
                             We tap into the skills and capabilities of the broader    according to their risk and return preferences and
                             FirstRand Group in South Africa and international         long-term investment goals, investors are able to
                             markets to leverage a broad range of investment           construct more robust investment portfolios with
                             opportunities that are not typically accessible to        true diversification benefits.
                             investors. Our integrated investment approach
                             blends traditional and non-traditional investment         Our team consists of specialists with expertise in
                             expertise with innovative private market and              structuring investments and allocating capital in
                             customised solutions, enabling us to offer solutions      all market conditions, and our capabilities span
                             that help our clients meet their investment objectives.   across:

                             By partnering with us, investors have access to an
                             investment manager with the backing of a large            • Private equity
                             parent company, innovative investment solutions           • Mezzanine financing
                             and a long track record of excellence.
                                                                                       • Unlisted corporate credit opportunities
                                                                                       • Impact investing
                             NEW PRIVATE MARKET INVESTING                              • Direct property
                             Today’s global investment climate of prolonged            • Liability-driven investments (LDI)
                             uncertainty calls for a shift beyond the traditional
                                                                                       • Infrastructure
                             understanding of diversification towards allocation
                             of capital across more alternative and varying            • Money market and fixed income solutions
                             sources of return.
                             We look beyond traditional approaches to actively
                             seek out more sources of return that can be               For further information:
                             invested across the capital structure. Ashburton          Please speak to one of our business development
                             Investments’ private market investments provide           managers on 011 282 8800 or email:
                             access to all parts of the capital structure through (retail investors)
                             private equity, mezzanine, senior unsecured and 
                             secured credit funds, all with varying risk and           (institutional investors)
                             return profiles to suit investors’ needs.       

                             6 HEDGENEWS AFRICA DIRECTORY 2020/2021
DIRECTORY Hedge Fund & Alternative Manager 2020/2021 - HedgeNews Africa
Enabling infrastructure investment –
a focal point for South Africa’s
depressed economy
Santhuri Thaver, Ashburton Investments

           s we face a significantly depressed       renewable energy market, there needs to be
           economic outlook with the urgent          increased focus on localisation, policies and
           need to revitalise our economy and        requirements around local manufacturing, the
           create jobs, infrastructure investment    re-skilling and upskilling of workers that will be
once again becomes a focal point to stimulate        impacted as we move towards a greener economy.
economic growth. It is an asset class that marries   Localisation must be done on a sustainable
well the economic benefits of growth and returns     basis that transcends the independent power
with a tangible social impact.                       producers (IPP) bid windows so that South Africa
                                                     becomes a permanent partner in the global
Traditional measures of risk and return are no       supply chain. An overall policy framework to
longer the only considerations when evaluating       encourage a transition to a green economy and a
investments. The impact of the investment            clear, predictable and stable policy environment
on the environment, human lives and the              can create the confidence required to stimulate
value being created for future generations is        private investment.
becoming increasingly important to investors.
Looking at the UN’s sustainable development          Over the past few years, there has been a
goals (SDGs), a large majority of these are met      significant under-spend on infrastructure, far
through infrastructure investment. Infrastructure    below the National Development Plan target,
investment thus fits very well into the drive for    which has not only impacted the country’s
sustainable investing with environment, social       economic growth pre-Covid but also the quality
and corporate governance (ESG) considerations        of life of those living in South Africa. The answer
being more prevalent in infrastructure financing.    is not widescale roll-out of infrastructure projects
Where project finance has been used to fund          but on sustainable and quality infrastructure that
infrastructure assets, these have been subject       is properly designed and delivered, reliable and
to equator principles, providing a framework for     resilient with equitable access to its benefits. As
managing environmental and social risk within        a country, we cannot afford another Medupi or
these projects.                                      Kusile.

When talking about sustainable investing, we         While investors are open to infrastructure
cannot ignore just transition. As we grow our        investing, there is a lack of availability of bankable

                                                          HEDGENEWS AFRICA DIRECTORY 2020/2021 7
DIRECTORY Hedge Fund & Alternative Manager 2020/2021 - HedgeNews Africa
projects. Infrastructure projects can be plagued
            by red tape with mis-alignment of development
            plans between different spheres of government
            delaying roll-out, but we are seeing some traction
            in this regard. Recent engagement between

            Government and the private sector has been
            encouraging, specifically around the creation of
            the Infrastructure Investment Office (IIO) to co-
            ordinate various stakeholders with the aim to
            fast track infrastructure development and reduce
            bottlenecks within the system. The inclusion
            of the Presidential Infrastructure Coordinating
            Commission (PICC) Technical Task team within
            the IIO to form what is called Infrastructure SA
            creates one umbrella and avenue under which
            infrastructure projects requiring funding from the
            fiscus will be considered.
                                                                     Santhuri Thaver
            Development of infrastructure is complex
            in nature and requires proper structuring,               with the development of infrastructure services in
            implementation and management to ensure                  areas where the majority of beneficiaries live or
            adequate mitigation of risks and attraction of           will retire.
            funding, with the IIO recognising their constraints
            and calling for assistance from the private sector       On the funding side, historically Government has
            to bolster the capacity and skills to fulfil their       largely funded infrastructure development. Given
            function as well as improve the quality of projects      the significant infrastructure gap, of approximately
            submitted for consideration from the provinces.          R2 trillion per the NDP plan to 2030 as well as the
            To date, 50 projects in key sectors of water and         impacts of the pandemic with rising debt-to-GDP
            sanitation, human settlements, and energy, have          levels, it can no longer be the case. Development
            been gazetted, funding secured, and necessary            finance institutions (DFIs) and commercial banks
            approvals fast tracked. Increasing the capacity of       play an important role, with DFIs providing much-
            this office will assist in creating a greater pipeline   needed project preparation facilities to assess
            of bankable investments.                                 feasibility and develop bankable projects, and the
                                                                     commercial banks being best placed to take the
            The establishment of the Infrastructure Fund             construction risks. Commercial banks, though,
            managed by the Development Bank of Southern              are constrained by capital requirements, with their
            Africa (DBSA) will seek to utilise R100 billion of       balance sheets not suited to holding long-term
            government support over 10 years to crowd in             assets. On the other side of the coin, institutional
            private capital. The fund will consider blended          investors are concerned about the illiquid nature
            financing. Instruments include provision of              of this asset class, with more work needing to
            subordinated debt to increase the first-loss             be done around increasing access to liquid
            buffer for senior debt providers, increased capital      infrastructure projects. Once an infrastructure
            commitments to reduce elevated debt levels               project is operating, it has been substantially de-
            for riskier projects and interest-rate subsidies         risked and can be refinanced into a listed project
            to reduce total debt costs. The aim of blended           bond, creating a more tradeable instrument.
            financing would be to enhance the fundamentals
            of a project that would otherwise not be bankable.       A listed bond does come with greater transparency
                                                                     to the market and increased reporting requirements
            The creation of a pipeline of projects is not            that may be met with apprehension from project
            solely a Government responsibility. Institutional        sponsors. This however needs to be balanced
            investors are also asking questions around direct        with the funding capacity of the capital markets to
            benefits created for their members. This is an           meet infrastructure needs, longer tenors that can
            area where the private sector could get involved         be issued through a project bond as well as the

            8 HEDGENEWS AFRICA DIRECTORY 2020/2021
DIRECTORY Hedge Fund & Alternative Manager 2020/2021 - HedgeNews Africa
benefits to sponsors to access diverse pools of
capital at reduced rates.

To get around the reduced flexibility of a listed
project bond versus unlisted debt, a managing
agent with the necessary skills, appointed by
the bondholders to manage the project from a
debt perspective, could address this challenge
with certain events of default still subject to
noteholder consent. This would ensure that
bondholders’ rights and interests are protected,
while maintaining flexibility that is required for
these types of dynamic projects.

Financiers could further encourage sustainability
by considering pricing ratchets, sustainable
financing can cater for downward ratchets in
the margin reducing financing costs if agreed
sustainable targets, verified by a third party, are
met, incentivising attainment of these targets.
Ultimately a sustainable business or project
creates a greater return profile for investors over
the long term.

Lastly, there needs to be standardisation on          Santhuri Thaver is a senior credit analyst at
definitions and measurement to allow investors to     Ashburton Investments. She spent seven years
assess the relative attractiveness of sustainable     in corporate and investment banking working
investments.                                          for several of the large South African financial
                                                      institutions gaining extensive corporate and
Overall, South Africa is really at the edge of an     project finance experience. Her role within
economic cliff but we have investors that are         the banking sector was that of a senior credit
keen to – and understand the need to – invest         manager and involved the structuring and
in infrastructure. However, hurdles need to be        approval of transactions. More recently and
overcome and addressed through collaboration          prior to joining Ashburton Investments, she was
between the public sector and private industry        a senior manager in KPMG’s Infrastructure &
players. We also need to acknowledge that we          Financing Unit responsible for leading financial
cannot do everything at once, so there should         advisory engagements on major infrastructure
be a focus on investments that can create the         projects. She holds a Bachelor of Accountancy
most significant impact from a financial and ESG      from the University of the Witwatersrand and is a
perspective.                                          qualified CA(SA) and CFA charterholder.

                                                          HEDGENEWS AFRICA DIRECTORY 2020/2021 9
DIRECTORY Hedge Fund & Alternative Manager 2020/2021 - HedgeNews Africa

             Chrysalis Capital was established in July 2008
             as a niche investment house that operates in the
Hedge fund

             unlisted credit market. Its value proposition is that
             it offers institutional fixed income investors an
             alternative source of yield which is not correlated
             to listed credit, yet positively correlated to inflation
             and interest rates. The Chrysalis team uses many
             years’ banking and finance experience to source,
             negotiate and package debt investments that
             deliver disproportionate risk-adjusted returns to
             their investor base. The inefficiencies of South
             Africa’s banking system have been exacerbated
             by Basel III, thus the opportunity set for investors
             in private-sector credit is significant. The company
             manages assets totalling circa R1.07 billion.
             The Chrysalis Credit Arbitrage Fund celebrated
             its 12-year track record in August 2020 – its              Carl Combrinck             Mark Pienaar
             annualised return over 12 years was 12.04%, an
             average of 7.08% above CPI, outperforming both             dealmaker in the structured finance team to head
             the ALBI (8.62% pa) and the All Share Total Return         of leveraged finance. He has in-depth knowledge
             Index (9.24% pa) over 12 years.                            and experience of banking credit policies and, as
                                                                        a qualified attorney with experience in commercial
                                                                        and insolvency law, has an intricate understanding
             The Chrysalis team selectively seeks out                   of the legal risks inherent in investing in private-
             investment opportunities by building relationships         sector credit.
             with select professionals in the private equity and
                                                                        Mark Pienaar is ex-Cape of Good Hope Bank and
             property sectors. The emphasis is on supporting
                                                                        Nedbank Corporate and has extensive experience
             growing sectors of the economy and resilient
                                                                        in commercial property finance. After leaving the
             businesses with strong and predictable cash
                                                                        bank, Mark spent many years facilitating large
             flows and quality assets, where risk is non-binary.
                                                                        property equity and debt transactions before
             Detailed legal structuring of all transactions is a
                                                                        joining Chrysalis.
             high priority in order to reduce risk to the minimum.
                                                                        Trish Swanepoel is the Head of Risk, she has
             THE TEAM
                                                                        more than 20 years’ experience in banking and
             Carl Combrinck has 20 years’ experience in                 plays a key role in legal implementation and fund
             banking and finance, of which eight years were             administration.
             spent at BoE Private Clients in various roles from
                                                                        Mike Russell joined the team in 2019 as a Senior
                                                                        Associate. He is an experienced deal maker out of
              Company                                                   the Nedbank Corporate Property Finance stable.

              Chrysalis Capital (Pty) Ltd,                              Melanie Arendse joined the team in 2019 as a
              2nd floor, The Terraces, 25 Protea Rd,                    Senior Fund Administrator.
              Claremont, Cape Town
                                                                        Service providers
              Phone:                           +27 21 673 3250          Administrator:                            SANNE

              Fax:                             +27 21 683 1396          Auditor:                                   Mazars

              Website:                Legal advisors:                               ENS
                                                                        Manco:                  Chrysalis Capital (Pty) Ltd

             10 HEDGENEWS AFRICA DIRECTORY 2020/2021

Greenpoint Capital was established in 2011 as
a specialist private credit investment manager,

                                                                                                                   Credit fund
focused on two primary credit strategies, being
direct lending and special situations investing. It
currently manages two investment funds, with its
flagship being Greenpoint Specialised Lending,
which has a track record of over nine years during         Investment team
which it has invested in more than 50 South African
medium-sized businesses, deploying in excess               Ryan Wood-Collier (CFA) Ryan co-founded and
of R2.8 billion. Since inception, it has delivered         is CEO of Greenpoint Capital. Having spent over 14
returns to investors in excess of 15% per annum            years in London working at Close Brothers in the
net of fees and taxes.                                     private credit and restructuring markets, he returned
                                                           to South Africa in 2014 and has been managing
                                                           Greenpoint Capital’s private credit funds since then.
Investment strategy
                                                           Ryan started his career in London at PwC, focused
Private credit is an asset class within the non-           on M&A and restructuring, during which time he
traditional segment of alternative investments.            completed his CFA.
As a private credit manager, Greenpoint Capital’s          Nic van Zyl (CA(SA)) Nic joined Greenpoint
business model is based on providing constructive          Capital in 2017 having spent over 10 years with
capital solutions to both high-growth businesses           Investec Group operating in the UK and South
or businesses with stressed or distressed capital          African leveraged finance and private equity markets.
structures. Greenpoint Capital seeks to work               Nic started his career at Deloitte South Africa
on a consensual basis alongside corporate                  having completed his BCom Financial Accounting
management teams and shareholders to effect                at Stellenbosch followed by a Masters degree in
positive capital structure solutions. Its investments      Management Research at Oxford. Nic completed his
are all privately negotiated, credit-led facilities that   CA at Investec as a member of the CA Program.
derive the majority of their return from a contractual
                                                           Nic Woolaway (CA(SA), CFA) Nic joined
interest yield, but may also participate in the upside
                                                           Greenpoint Capital in 2019 as COO with over 17
through equity participation instruments. The focus
                                                           years in investment banking and asset management
is, however, on capital preservation with downside
                                                           experience, six in SA and 11 in the UK. Prior to
protection achieved through specific security taken
                                                           Greenpoint, Nic was COO of RECM for four years,
on each underlying investment.
                                                           having spent eight years with hedge fund BlueCrest
                                                           Capital Management and three years with UBS
 Company                                                   Investment Bank in the UK.

 Greenpoint Capital (Pty) Ltd
 4th Floor, The Terraces, 25 Protea Road                    Investment terms
 Claremont, Cape Town
                                                            Fund:           Greenpoint Specialised Lending
                                                            Fund strategy:                     Direct lending
                                                            Hurdle rate:                            SA Prime
                                                            Fund open:                                    Yes
Service providers
                                                            Management fee:                             1.5%
Auditor:                                         BDO
                                                            Performance fee:                15% over hurdle
Legal advisor:               Cliffe Dekker Hoffmeyer
                                                            Redemption:        Quarterly, six months’ notice
Manco:                  Greenpoint Capital (Pty) Ltd

                                                              HEDGENEWS AFRICA DIRECTORY 2020/2021 11

            A perspective on private credit
            Ryan Wood-Collier, Greenpoint Capital

                       raditionally, gaining access to corporate      the market, but the market is small and somewhat
                       credit as an investment was either             under-developed. That said, the opportunity for
                       achieved indirectly through investing in       private credit is growing, particularly in the current
                       fixed income funds or, as an institutional     environment. “Private credit is by no means a
            investor, by participating in the syndication of senior   replacement to senior debt lending – we aim to
            secured loans by commercial banks. This meant             supplement the lending market to provide optimal
            that, specifically in the South African context, the      funding solutions for borrowers, where the senior
            ability to gain direct access to corporate credit as      lenders may not have the ability or appetite to
            an investment class has, until more recently, been        participate,” says Ryan Wood-Collier, CEO of
            very limited.                                             Greenpoint Capital.

            Private credit funds have seen significant growth         Private credit is an asset class within the non-
            in developed markets over the past 10 years,              traditional asset management segment of
            but specifically in the last five years. While private    alternative investments. It typically comprises a
            credit has existed as a well-established asset            group of credit strategies that fall into two broad
            class in the US for many years, the UK and EU             categories, being i) direct lending and ii) distressed/
            lending markets were historically relationship bank       special situations investing.
            driven. The global financial crisis of 2007/8 (GFC)
            and Basel III regulatory changes resulted in senior       Unlike fixed income, managers of private credit
            lenders withdrawing from event-driven funding of          funds typically invest in private companies, where
            medium-sized businesses, and opened the door to           there is a corporate or other idiosyncratic event: this
            private credit funds. Since then, private credit has      could be a refinancing of the current capital structure
            become a recognised and understood asset class,           of the business, the funding of an acquisition or
            attracting increasing interest from investors.            growth opportunity, or the provision of new capital
                                                                      to effect a restructuring or turn-around of the
            According to Preqin’s Q2 2020 Quarterly Update            business. The investments are bespokely structured
            Report, US$56 billion in private credit commitments       and privately negotiated to both meet the specific
            was raised across 85 funds in the first half of this      needs of the underlying company, but also provide
            calendar year. Despite the effects of Covid-19,           the return compensation and requisite security for
            investors have retained significant appetite for the      the risk taken in each investment. The investments
            asset class, with the number of individual investors      tend to be illiquid (i.e. not actively traded or widely
            committing $50 million or more over the next 12           syndicated) and for durations of between two to
            months increasing to 65% in Q2 2020 from 37%              five years, but it is that illiquidity that generally allows
            a year ago.                                               for a disproportionate risk-adjusted return to be
            In the South African context, corporate lending is
            still very much the preserve of the senior lenders,       Unlike private equity, private credit typically sits in a
            much like the UK & EU markets pre-GFC. There are          preferred position in the capital structure. This can
            a few established private credit funds operating in       be anywhere from first ranking, senior secured to

            12 HEDGENEWS AFRICA DIRECTORY 2020/2021
Private debt fundraising (Global)
                                   70                                                                            80
Aggregate capital raised (US$bn)

                                                                                                                      Number of funds closed
                                   60                                                                            70
                                   50                                                                            60

                                   20                                                                            20
                                   10                                                                            10

                                        Q1 Q2 Q 3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
                                           2015         2016          2017          2018        2019      2020
                                                    Aggregate capital raised         Number of funds closed                                    Ryan Wood-Collier
                                                                                                        Source: Preqin

              Greenpoint Specialised Lending - net investor returns                                                                            and execute a transaction to meet
                                                                 Cumulative       Annualised
                                                                                                                                               the risk-return characteristics of a
                                                                                                       64.6%     70%
                                   Greenpoint Specialised Lending 64.6%            16.6%                                                       specific deal,” says Wood-Collier.
                                   3M Jibar + 6%                  50.6%            13.4%                         60%
                                   SA Prime                       37.3%            10.3%               50.6%                                   “But the real value is ensuring
                                                                  14.7%            4.3%                          50%                           that the manager is embedded
                                   JSE ALSI TRI
                                                                                                       37.3%     40%                           in the detail of each portfolio
                                                                                                                 30%                           company investment, has a very
                                                                                                       14.7%     20%                           strong understanding of the legal
                                                                                                                 10%                           framework they are operating in
                                                                                                                                               and has the ability to manage and
                                                                                                                                               control the intricacies involved in
                                                                                                                                               resolving a situation if things go
Fe 7

Fe 8

Fe 9
Au 7

Au 8

Au 9

Au 0
De 7

De 8

De 9
Ap 8


Ap 0
Oc 7

Oc 8


Ju 8

Ju 9

Ju 0























      a preferred equity position. In                                          instruments’ such as options,                                   Ryan Wood-Collier is the CEO
      most cases, loans will benefit                                           warrants or some direct equity.                                 of Greenpoint Capital, a private
      from security and therefore, the                                         “This largely contractual yield will                            credit fund manager specialising
      investment trades the upside                                             produce a more consistent return                                in both direct lending and
      associated with pure equity for                                          profile, possibly with some cash                                investing in special situations/
      downside protection associated                                           yield. Investors should expect an                               restructuring        opportunities,
      with its preferred position in the                                       illiquidity premium over a fixed                                with a nine-year track record of
      capital structure and security                                           income investment with a more                                   investing in bespoke corporate
      taken. “The combination of the                                           stable return profile.” says Wood-                              credit in South Africa. Greenpoint
      bespoke structuring, position in                                         Collier. “An investment in private                              provides constructive capital
      the capital structure and security                                       credit offers a diversification                                 solutions to either growing or
      associated with the investment,                                          opportunity for investors as the                                financially challenged businesses,
      offers what we believe to be a                                           return profile is uncorrelated to                               working on a consensual
      disproportionate      risk-adjusted                                      traditional fixed income or listed                              basis with the company and
      return, provided the investment is                                       equity returns, but also to other                               its management team, as well
      managed correctly,” says Wood-                                           illiquid investments, such as                                   as senior lenders and other
      Collier.                                                                 private equity, as it will not exhibit                          stakeholders in the business to
                                                                               the typical ‘J-curve’ of a private                              effect an optimal capital solution.
      What should an investor in                                               equity investment.”                                             The team is based in Cape
      private credit expect from their                                                                                                         Town and brings over 35 years’
      investment? Typically the majority                                       Managing a portfolio of private                                 combined experience of lending
      of the return will be structured as                                      credit investments does, however,                               to and restructuring private
      a contractual interest yield, with                                       require a very specific skillset. “It is                        equity-backed businesses and
      the potential for some upside                                            one thing to be able to source the                              corporates in both SA and
      through ‘equity participation                                            right opportunities and structure                               the UK.

                                                                                                         HEDGENEWS AFRICA DIRECTORY 2020/2021 13
Alternative Asset Managers

                             STANLIB is a specialist investment manager in South
                             Africa, administering over R500 billion in assets under
                             We offer depth of expertise across a wide range of
                             investment disciplines, spanning active and passive
                             management, single- and multi-manager offerings.
                             STANLIB’s public markets capability includes dedicated
                             teams specialising in absolute return, balanced, equity,
                             fixed income, listed property and multi-management.
                             STANLIB’s private markets capability offers investors
                             access to a broad range of alternative assets managed         OUR SOLUTIONS
                             by two teams of highly regarded and experienced
                             investment professionals with an established track            STANLIB offers clients both pooled and segregated
                             record of over 10 years. These teams manage over R60          investment solutions across a broad choice of traditional
                             billion in assets in pan-African private debt and private     and alternative asset classes.
                             equity funds.
                                                                                           INVESTMENT CAPABILITIES
                             Our unique blend of skills, areas of specialisation and
                                                                                           Traditional asset classes: Our active single-manager
                             perspectives enables us to make better-informed
                                                                                           capabilities invest across all traditional asset classes,
                             decisions so we can help our clients, both individuals and
                                                                                           including absolute return, balanced, equity, fixed income
                             institutions, achieve their financial goals.
                                                                                           and listed property.
                             Our alternatives capability includes:
                                                                                           Credit Alternatives: STANLIB Credit Alternatives
                             • Infrastructure development                                  invests in a broad spectrum of unlisted and listed credit
                             • Private equity                                              opportunities in South Africa, and selected countries across
                                                                                           the African continent. Our team of over 25 specialists with
                             • REITS
                                                                                           deep relationship networks manages more than R55 billion
                             • Unlisted debt                                               in assets.
                             • Africa unlisted debt
                                                                                           Infrastructure: STANLIB Infrastructure Investments is a
                             • Impact                                                      specialised private equity team that invests across a range
                                                                                           of infrastructure development projects in South Africa. We
                             Our depth of expertise across a comprehensive
                                                                                           focus mainly on the power, renewable energy, railways,
                             range of traditional and alternative asset classes
                                                                                           airports, water and telecommunication sectors, promoting
                             enables us to:
                                                                                           socially responsible and environmentally        sustainable
                             • Share deep insights and make better investment             business practices and the highest standards of corporate
                                decisions                                                  governance.
                             • Deliver tailored solutions that meet diverse client needs
                                                                                           Multi-manager: STANLIB Multi-Manager draws from
                             • Foster rigorous debate and idea generation.                 across asset classes and managers to find the best
                             Our incentivised and dynamic investment teams are             solutions for investors. We have specialist teams handling
                             able to build diversified portfolios and quickly react to     fixed income, property, African equities, multi-asset and
                             changing circumstances in the market.                         real return products, alternative fund of funds, global
                                                                                           equities and global bonds. We also offer dedicated multi-
                             Yet we are big enough to make a difference.
                                                                                           manager advisory services.
                             Being part of the broader Standard Bank and Liberty
                             groups gives us access to:                                    For further information contact:
                             • Deal flow
                                                                                           Global and institutional clients
                             • Expertise                                                   E:
                             • Data                                                        W:

                             14 HEDGENEWS AFRICA DIRECTORY 2020/2021
Breaking the imbalance:
the role of alternative managers
Johan Marnewick and Jonathan De La Pasture, STANLIB Credit Alternatives

        he Covid-19 pandemic has prompted               classes. “Global capital is going ex-value in the
        huge stimulus from central banks around         developed world and there are huge opportunities
        the world, with the European Central            in emerging and frontier markets where price
        Bank and the US Federal Reserve                 and risk relationships suggest the inverse of
pumping trillions into the markets.                     the developed markets’ established order. As
                                                        managers, these dislocations that pre-existed but
On both sides of the Atlantic, there are ongoing        have been exacerbated by the pandemic are an
fears of negative interest rates – something the        opportunity to correct imbalances.”
developed world has battled with in the wake of
the global financial crisis, creating concerns that     “The developed world has a dam of liquidity and
investors will struggle to meet their long-term         much of the earth is saturated. We need to fetch
return objectives.                                      capital and deploy it to be more productive where
                                                        it is needed – the parched African plains.”
The result is that underlying risks are not
represented in global equity or bond markets,           For STANLIB, the listed debt and unlisted credit
leading commentators to cite dislocated asset           markets across Africa, including South Africa,
prices.                                                 offer broad avenues to invest in various listed
                                                        and unlisted credit assets, including senior, high
Yet Wall Street continues its winning streak with US    yield, property and infrastructure finance. Such
equity indices Nasdaq and the Standard & Poor’s         assets tend not to be pro-cyclical, offering steadier
in record-high territory (as of early October), with    income in troubled times, albeit with lower liquidity.
constituent companies trading at price-earnings         Often enough, the risks are overstated, with yields
multiples of as much as 30 times – despite Main         at many multiples of those in the developed world.
Street being on fiscal life support due to the
ongoing pandemic.                                       Frontier markets currently present an important
                                                        value proposition, adds Jonathan De La Pasture,
As investors around the world search for yield,         portfolio manager, credit alternatives, at STANLIB.
alternative asset managers have a duty and the          In particular, pan-African eurodollar debt is one of
opportunity to seek and direct capital to productive    the most attractive asset classes in the world right
uses elsewhere – away from traditional assets           now on a risk-adjusted basis.
to alternatives – and geographically, from the
developed world to emerging and frontier markets.       “International capital can make an enormous
“For us, this is the opportunity of a lifetime,” says   difference in Africa and many investors are
Johan Marnewick, head of the credit alternatives        motivated to do just that,” he says. “There is a need
capability at STANLIB, which manages assets             to drive economic inclusion and help the continent
of R55 billion with a diversified credit capability     to develop, while giving investors measurable and
offering access to a range of alternative asset         predictable outcomes.”

                                                           HEDGENEWS AFRICA DIRECTORY 2020/2021 15

            Johan Marnewick                                       Jonathan De La Pasture

            De La Pasture notes that the pan-African              have inferior credit ratings, or ratings on the same
            eurobond market (beyond South Africa) has been        level as high-yield debt in developed markets.
            in existence since 2006, when the Seychelles          This is often because their ratings are capped by
            went to market with the continent’s first eurobond,   country risk.
            raising $200 million.
                                                                  “Very often [in Africa] we are looking at leading
            In a relatively short time, the market has reached    corporates with low levels of leverage – the
            US$180 billion, and is now seen as an investible      underlying metrics are very different to US high-
            asset class on the radar screen of frontier and       yield names, which achieve similar ratings,” says
            emerging market investors, improving liquidity and    De La Pasture.
            cutting entry and exit costs.
                                                                  The broad African continent is also not a
            For global and domestic investors, there              homogenous mass, with different economies
            are different ways to allocate to the credit          offering different contributions. The dynamics
            space, tapping into various sub-themes, from          of leading economies such as South Africa and
            infrastructure, telecommunications and financials,    Egypt will differ significantly from the relatively
            and into impact-focused areas such as healthcare      underdeveloped Uganda, while Kenya and Ghana
            and education. ESG screening can be applied           are reflecting political stability after recent political
            across the opportunity set to identify themes that    transitions.
            are important to investors.
                                                                  Yet many investors have had their fingers burnt
            Given the global macroeconomic backdrop, it is        in Africa, particularly in the listed space, and local
            an opportune time to consider an allocation to        knowledge is key to breaking the trust deficit.
            unlisted credit, which offers direct exposure to
            underlying economies, including local-currency        While emerging market and African sovereign
            credit where appropriate. When combined with          risks cannot be fully circumvented, good portfolio
            hard currency listed credit in a portfolio, yields    construction and diversification can minimise
            of 7-8 % are possible, whereas achieving similar      potential negative impacts.
            returns in developed markets would require
            venturing into mid-market leveraged debt funds,       Investors looking at the Africa opportunity set
            potentially with liquidity constraints and lengthy    also need to ensure there are no unintended
            lock-ups.                                             consequences in their allocations, including
                                                                  matching the currency of an investment to its
            Many corporates operating in Africa will tend to      underlying revenue stream.

            16 HEDGENEWS AFRICA DIRECTORY 2020/2021
“As a credit-focused team we are very selective         In the broader African context, South African
and pick names with underlying strength. We are         allocators can also now invest 10% into pan
not advising a rush into these markets – you need       Africa over and above the existing 30% overseas
the right institutional-quality manager with in-depth   allocation according to Regulation 28 of the
relationships on the ground,” says Marnewick.           Pension Funds Act.

In the credit space, besides alignment with local       “We believe the way to lead South Africa onto the
market risks, investors should also look out for        continent is through debt rather than equity,” says
good recovery practice, with managers that              Marnewick. “While private equity brings extensive
know how to protect capital in case things don’t        lock-ups, unlisted credit has a defined pay-off
go according to plan, and local on-the-ground           profile that is appropriate for institutions looking
relationships to ensure investment terms are            to preserve capital and generate risk-adjusted
honoured.                                               returns via self-liquidating portfolios. But there are
                                                        idiosyncratic risks across markets and you need
In South Africa, fuelling growth in employment and      to partner with the right manager to lead you there
infrastructure are key concerns for investors in a      and undertake the selection and de-selection
Covid-19-hit environment, and private debt can          exercise.”
make a meaningful difference, via tailored impact-
related mandates.                                       Johan Marnewick is head of the credit alternatives
                                                        team at STANLIB, and Jonathan De La Pasture is
“There is enormous demand for the private sector        a portfolio manager. STANLIB’s Credit Alternatives
to step in to complement the capacity and focus         team has collective investment experience of
areas of the state,” says Marnewick. “While the         more than 350 years and AUM of R55 billion,
public sector has been hollowed out, the private        with a diversified credit capability offering access
sector offers significant experience, skills and the    to a range of alternative asset types, in South
latest technology. The onus is on investors to act      Africa and the broader African continent, both for
responsibly and carefully with their allocations.”      domestic and global allocators.


   927137 STANLIB khanyisa A4.indd 1                                                                  2020/10/29 12:34

                                                           HEDGENEWS AFRICA DIRECTORY 2020/2021 17
Alternative Asset Managers

                             WHY WESTBROOKE?
                             Founded in 2004, Westbrooke invests and manages capital
                             in multiple geographies on behalf of its shareholders and
                             investors in private equity, venture capital, private debt,
                             hybrid equity and real estate. We manage approximately
                             R6 billion of shareholder and investor capital invested
                             predominantly in South Africa, the UK and the US with
                             offices in Johannesburg and London.

                             Westbrooke Alternative Asset Management was established
                             as a multi-asset, multi-strategy manager of alternative
                             investment funds and products structured to preserve
                             and compound our clients’ wealth to cement their
                             future prosperity.
                             Our team is comprised of experienced entrepreneurs
                             and investment professionals who apply a broad range of
                             experience and skills to deliver investment opportunities      Hybrid equity
                             which offer a simple investable outcome – predictable,
                                                                                              ransactions which demonstrate debt-like risk mitigation
                             sustainable, risk-managed long-term returns for investors in
                                                                                             but with equity return characteristics
                             an increasingly complex environment.
                                                                                              apitalising on market pricing dislocations and liquidity
                                                                                             constraints (e.g. COVID-19)
                             ENTREPRENEURIAL, EXPERIENCED                                   • Targeting a blend of yield and capital growth
                             AND ALIGNED
                             Since inception, we have invested in and led over 180
                                                                                            Real estate
                             transactions with a combined deal value of over R14 billion.
                             Over this period, our private equity assets have achieved      •D
                                                                                              irect real estate equity investments           alongside
                             an internal rate of return (IRR) in excess of 30%.              experienced, on-the-ground partners

                             We have a heritage as a shareholder and operator of            •S
                                                                                              ubsectors include residential, mobile home parks,
                             assets, investing our own capital to develop and grow           logistics, student accommodation and hospitality
                             our businesses and assets. We believe our operational          • Targeting a blend of yield and capital growth
                             experience and expertise gives us and our investors a
                             competitive advantage.                                         Private equity and venture capital

                             We are totally committed to financial alignment. We invest     • Partnership with best-of-breed operating partners
                             materially alongside our clients and partners in all our       •G
                                                                                              lobal investment reach providing investors unique
                             funds and investments.                                          access to investments as a result of Westbrooke’s
                                                                                             relationship set
                                                                                            • Capital growth focused
                             INVESTMENT SPECTRUM
                             Private debt                                                   For further information contact:
                             • Loans extended to privately held companies                   Kate Langlois
                             • Diversification achieved through portfolios which spread    E:
                               risk across asset classes and geographies
                                                                                            Dino Zuccollo
                             • Robust security packages with conservative gearing          E:
                               and significant equity cushions
                             • Attractive risk-adjusted returns targeting cash yield and   Or call us on 011 245 0860.
                               real underlying liquidity                                    W:

                             18 HEDGENEWS AFRICA DIRECTORY 2020/2021
South African investors’ increased
appetite for private debt over
low-yielding fixed income
Richard Asherson and Dino Zuccollo, Westbrooke Alternative Asset Management

         rivate debt has since 2008 grown from        hard as free money has become available.
         the global investment periphery to one of
         the world’s largest and fastest growing      “In this environment, private debt returns offer
         alternative asset classes, according to      similar historic returns to equity investments but
Westbrooke Alternative Asset Management. In a         with security packages (e.g. direct security against
low-yielding investment universe, private debt is a   a tangible asset) generating an asymmetric risk/
core part of fixed income portfolios.                 return profile.”

“Since 2018, Westbrooke has invested more             Simply explained, private debt is where a loan
than GBP100 million of investor capital across        is made by a non-bank lender and therefore falls
35 private debt transactions, primarily in the        into the broader category of ‘alternative debt’ or
UK,” says Westbrooke’s head of distribution,          ‘alternative credit’. The term private debt is used
Dino Zuccollo. “Post the Covid-19 pandemic,           interchangeably with ‘direct lending’, ‘private
governments’ response across the globe has            lending’ and ‘private credit’.
been to assist economies by dropping rates to
zero. At the same time, equity valuations have run    Private debt investments are typically used to bridge

                                                                                       * Source: Bank of England

                                                          HEDGENEWS AFRICA DIRECTORY 2020/2021 19

            Richard Asherson                                            Dino Zuccollo

            property transactions, real estate development,             medium-sized companies has increased by more
            finance business growth, provide working capital            than 15% in the first half of 2020, driven by an
            and fund infrastructure.                                    increase in funding needs from this market. Whilst
                                                                        some of this increase has been funded by the UK’s
            Private     investors      including      high-net-worth    Coronavirus Business Interruption Loan Scheme
            individuals, family offices and institutions view private   (CBILS), private debt funds have been pivotal in
            debt investments as an opportunity to enhance               funding this demand.
            yield within a fixed income portfolio and generate
            predictable, protected, hard-currency cash yields.          Zuccollo concludes: “In Westbrooke’s view, the
                                                                        rise of private debt as an asset class is still in its
            According to Westbrooke Alternative Asset                   infancy. Sophisticated investors across the globe
            Management UK’s Richard Asherson, “Private debt             have steadily increased their allocation to this fixed
            allows investors to access opportunities in markets         income alternative as part of a well-balanced,
            that are otherwise inaccessible. Compared with              diversified investment portfolio. However, quality
            traditional fixed income, private debt can provide          private debt funds can be difficult to access,
            investors with higher yields, portfolio diversification     especially where South Africans are looking to invest
            and lower portfolio volatility.”                            in offshore markets. We suggest that investors
                                                                        seek out well-established asset managers, who
            At a high level, the higher returns generated by            have deep local networks and infrastructure and a
            private debt investments can be explained by:               track record of performance to help clients navigate
                                                                        gaining exposure to the asset class.”
            • an illiquidity premium (private loans earn higher
            returns because they are not listed and investors are       Richard Asherson and Dino Zuccollo and are
            therefore required to invest for a prescribed period),      respectively principal and head of distribution
            • a structural/complexity premium (deals are often          at Westbrooke Alternative Asset Management.
            bespoke and require structuring)                            Founded in 2004, Westbrooke invests and
            • an off-market/disinformation premium (due to a            manages capital in multiple geographies on behalf
            lack of an efficient market in the space) and               of its shareholders and investors in private equity,
            • the size of loans (as banks have moved resources          venture capital, private debt, hybrid equity and real
            to larger loans, the mid-market is underserviced and        estate.Westbrooke manages approximately R6
            accessibility to cheaper capital is limited).               billion of shareholder and investor capital invested
                                                                        predominantly in SA, the UK and US, with offices in
            In the United Kingdom loan activity to small and            Johannesburg and London.

            20 HEDGENEWS AFRICA DIRECTORY 2020/2021
Long/short equity

36ONE Hedge Funds*
The 36ONE SNN QI Hedge Fund (QIHF) and

                                                                                                                    Hedge fund
36ONE SNN Retail Hedge Fund (RHF) are both
single-strategy, South African equity long/short          Investment team
hedge funds, with a moderate net equity bias.
We have a long term track record and currently            Cy Jacobs is the lead portfolio manager and is
manage ~R10 billion in hedge fund strategies.             supported by a strong investment team made up
These funds invest predominantly in South African         of 10 investment professionals: a group of hand-
listed equities as well as offshore listed equities and   picked, exceptional and experienced individuals. Cy
other financial instruments to enhance returns and        is one of the co-founders of 36ONE and heads up
manage risk. We aim to grow investors’ capital in         the investment team. He has been in the industry for
real terms over the long term and reduce volatility       over 20 years and holds a BCom, BAcc and CA (SA).
by managing the risks associated with equities.
                                                           Investment terms
Investment strategy
                                                           Fund:            36ONE SNN QI Hedge Fund
Both funds are equity long/short hedge funds and           Retail or qualified product:              Qualified
are managed pari passu. Our investment approach
is centred on the principle that the market does not       Hurdle rate:              Standard Bank call rate
efficiently price securities at all times. We therefore    High water mark:                                Yes
believe that stock selection through bottom-up             Fund open:                                      Yes
fundamental analysis can outperform over time.
                                                           Min investment:                          R1 million
We focus on having a solid grasp of the industry
dynamics as well as understanding a company’s              Management fee:                1% p.a. (excl. VAT)
profitability drivers and positioning within the           Performance fee:         20% (excl. VAT) of gains
industry. Macroeconomic views play a supporting                                   using the high water mark
role in portfolio construction.                            Subscription:                              Monthly
 Company                                                   Redemption:                  One calendar month

 36ONE Asset Management (Pty) Ltd
                                                           Fund:         36ONE SNN Retail Hedge Fund
 6A Sandown Valley Crescent, Sandown,
 Sandton, 2196                                             Hurdle rate:              Standard Bank call rate
 Fund manager:                           Cy Jacobs         High water mark:                                 No
 Business administration:              Steven Liptz        Fund open:                                      Yes
 Marketing:  Jacqui Ronne and Stash Martins               Min investment:                          R100,000
 Phone:                           +27 10 501 0250          Management fee:                1% p.a. (excl. VAT)
 Email:                      Performance fee:            20% (excl. VAT) of
                                                                         excess above benchmark over a
                                                                 rolling one year period, capped at 3.5%
 ISIN or ref code:           ZAE000284451 (QIHF) /
                                                           Subscription:                                  Daily
                               ZAE000240305 (RHF)
                                                           Redemption:                                    Daily
Service providers
Prime broker:                  Peresec Prime Brokers
Administrator: Sanne Fund Services SA (Pty) Ltd           Strategy: South African - Long/Short Equity - Long Bias
Manco: Sanne Management Company (RF) (Pty) Ltd            AUM:            R8.6 billion (as at 31 August 2020)
Auditor:                      PricewaterhouseCoopers      Inception date:                  QIHF: 1 April 2006
Legal advisor:            Edward Nathan Sonnenbergs        RHF (CISCA inception date): 1 November 2016
*See disclaimer page 91
                                                             HEDGENEWS AFRICA DIRECTORY 2020/2021 21
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