Peregrine Capital was founded in July 1998 by Clive Nates and David Fraser. Now in its 17th year, it is the oldest hedge fund manager in the South African market and has displayed a consistent investment ethos since inception. Peregrine Capital accounts for around 8% of the South African industry asset base. Management team owns 50% of the management company, while Peregrine Holdings Limited (a JSE listed financial conglomerate) owns the remaining 50%.
The company is predominantly focused on the South African listed equity market through one investment philosophy and style (bottom up, stock picking) but offers four strategies with varying risk levels, including two funds with US-$ classes.
Peregrine Capital’s High Growth Fund has been compounding at 30% annually since inception. Their initial investor enjoyed a 60x return. Over that time period the South African equity markets have also performed strongly, however the team at Peregrine has even outperformed the local market by over 100% year on year, which is a credible demonstration of consistent Alpha. Peregrine Capital can also invest in listed property, bonds and offshore opportunities. All of Peregrine Capital’s Rand based funds will close to new investments at the end of October, and there is only $50m capacity left in the US-$ based funds.
Special skills are needed to successfully run a highly concentrated funds
Peregrine’s top 10 holdings average 75% of exposure, but the team is convinced, and has indeed proven, that the excess risk-adjusted return from a concentrated portfolio outweighs the downside of potential volatility increases. In this Opalesque.TV BACKSTAGE video, partner and co-PM Jacques Conradie explains that conviction is the pre-condition for concentration, and the appropriate conviction can only be developed by deep and independent research. Still, volatility will test your convictions. The investment team is “not afraid of complicated situations” and neither of taking the right positions early while others might “wait until the dust settles”. Peregrine has also developed very efficient approaches and procedures to risk management.
Jacques also speaks about:
Can risk management add alpha? Why three PMs make a difference to one PM
The significance of real, active hedging
Why creating Alpha is hard: The need to “out-think” the competition. How to make money on the short side
Making money independent of South African equity market performance. Case Study: “Outsurance”
Jacques Conradie’s academic and professional credentials include a BCom (Hons) (Actuarial), FASSA, CFA. He has 8 years (all at Peregrine Capital) investment management experience. Jacques was awarded the Chancellor’s medal for being the top student graduating from Stellenbosch University in 2005. Jacques also represented South Africa at the International Mathematical Olympiad on three occasions and also at the International Olympiad in Informatics, winning three Bronze medals at these events.
He started his career at Old Mutual in 2006 where he worked in the Life Insurance Product Development team and qualified as an Actuary during that time. Jacques joined Peregrine Capital in August 2007, and currently covers a number of sectors including banks, insurers, telecoms, media, IT and selected industrials. Jacques is also a member of the investment committee of the Mandela Rhodes foundation.
In a time of increasing change and uncertainty, we must be clear on what will not change to not get distracted.
Strategic Portfolio Management.
1. Periodic evaluation and prioritization of the entire innovation portfolio.
2. Strategic and priority-based resource allocation.
On a strategic level, portfolio and resource management must be fully aligned.
3. Release and exit of innovation initiatives.
About the authors.
Dr. Ralph-Christian Ohr has been working in several innovation, division and product management functions for international, technology-based companies. His interest is aimed at organizational and personal capabilities for high innovation performance. He authors the Integrative Innovation Blog.
The Biggest Mistakes in Managing a Portfolio.
The Biggest Mistakes in Financial Planning Series.
by Harvey Jacobson, CHFC, MBA, CLU.
Investors who have remained consistent with their risk profiles through volatile markets have seen a substantial recovery in their portfolios since March 2009. Those who are truly behind are those who panicked and are now left with the decision of how to recover their losses. They can, but it is a much slower recovery.
This article published originally April 13, 2010, Los Angeles Daily News.
Managing an agile portfolio.
When the right people on the right teams have the right context, they naturally do the right thing.
Set the right context.