Download alternative investments: hedge funds capability

alternative
investments:
hedge funds
capability
Use the full investment universe
to protect and grow wealth
contents
2
Introduction
03
Innovative investment tools
06
An overview of the market
12
An overview of our capability
14
Risk management
20
How to choose a manager
25
Meet the team
26
Why Sanlam Alternative Investments
32
www.sanlaminvestments.com | hedge fund capability
introduction
‘When
nothing
We believe
is
sure,
everyone
everything
deserves
is
to possible.’
live their
Margaret
Drabble
best lives
possible.
We aim to improve people’s
lives by being Wealthsmiths™
We take pride in our
responsibility towards society
We believe everyone deserves
to live their best lives possible. A
Wealthsmith™ is a person who has
a deep understanding of the true
definition of wealth and knows
how to create it and maintain
it over the long term. To be a
Wealthsmith™ is to be patient, to
act meticulously and never to be
hurried. It’s having a shrewd mind,
and an understanding of what it
takes to create wealth and be able
to give more of it back.
We contribute to economic
stability by making responsible
investment and business decisions
to the long-term benefit of all
our stakeholders. For our clients
to prosper, the society in which
we live also has to prosper. We
therefore make capital allocation
decisions on a responsible basis.
This is also referred to as impact
or responsible investing, where we
actively consider the environment,
as well as the social and corporate
governance elements of our own
investment choices.
As Wealthsmiths™ we are
committed to building
wealth for our clients over
the long term
This means we are committed to
building legacies to embed the
right ethical climate, governance
systems and practices in our
business, and to transform our
business to be representative of
the communities around us.
A Wealthsmith also knows
inherently that wealth isn’t only
measured in rands and cents
It’s so much more than that. It’s
peace of mind for investors and
those who are entrusted to make
investment decisions on behalf
of others.
hedge fund capability | www.institutionalimpact.com
3
our
commitment
to you
When it comes to investing, there’s often the
temptation to ride the euphoria of speculation.
We resist this. We carefully do our homework,
weigh up the pros and cons, check, re-check
and analyse, scrutinise and remove emotion
from each and every investment decision
we make.
We believe that there’s a time to be cautious
and a time to be bold. Knowing when to be
which is what makes us Wealthsmiths™.
Whether you are an investor or are entrusted
with a duty of care to help an investor make
the best possible decisions about their money,
we are tirelessly committed to helping you
achieve the return and risk objectives that are
important to you.
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hedge fund capability | www.institutionalimpact.com
5
we give you
a broad set
of innovative
investment
tools
to protect and grow wealth
irrespective of market
movements
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www.sanlaminvestments.com | hedge fund capability
When volatility increases,
asset classes tend to behave
in similar ways
History has shown that when
markets become more volatile,
asset classes that were already
correlated can become even more
so. This fundamentally reduces
the diversification benefits of
traditional asset classes.
Alternative investments can
improve diversification and
reduce overall volatility
One of the main benefits of
alternative investments is to
provide diversification at an overall
portfolio level. The protection
and return potential are other
attractive characteristics. Studies
show that adding uncorrelated
assets to a portfolio reduces total
portfolio risk and therefore may
improve the risk adjusted return
of traditional portfolios.
We offer a broader set of
tools to generate returns and
manage risk
not be available to traditional asset
managers. We give you access to
a wide range of asset classes that
include private equity real estate
and private equity infrastructure
funds, hedge funds and fund of
hedge funds. Most importantly
for larger institutional clients and
asset consultants, we provide you
with distinctive structures and
tools, and the expertise to use
these to meet your needs.
Large university endowment
funds embrace the benefits of
hedge fund allocations
US-based University Endowment
Funds such as Yale and Harvard
have been leaders in diversified
multi-asset class investing for
over two decades. Notably,
their approach to asset class
diversification includes a large
exposure to alternative asset
classes. Through this approach to
investing, they have consistently
achieved attractive annual returns
with moderate risk.*
We give you the ability and
flexibility to invest across a wide
range of sectors and to respond
quickly to changes in the market.
We can therefore help you pursue
opportunities using tools that may
*Frontier Investment management LLP research: Investing
Like the Harvard and Yale Endowment Funds, March 2013
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‘Substantial allocations to alternate assets offer a
level of diversification unavailable to investors in
traditional assets, allowing the creation of
portfolios with superior return characteristics.’
David F. Swensen, CIO, The Yale Endowment Report,
Yale Endowment Fund (2010)
Retirement funds
• Can better manage the risks of
meeting specific and often
fixed liabilities
• Reduces risk through diversification
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Individual investors
• Can access some of the best money
managers
• Have increased flexibility in the way
their money is managed
• Introduces diversification to portfolios
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Reduce your
dependence
on traditional
solutions
to solve new investment
challenges and uncertainty
10
What are the investment
attributes of alternative
investments?
Alternative investment
managers have more
flexibility to maximise returns
Alternatives offer investors
a distinct set of attributes
that are not commonly found
in mainstream investments
products. They typically have a
lower correlation to traditional
investment products and offer
real diversification benefits.
There are basic similarities
between traditional and
alternative investments: both
invest in a variety of asset classes
(for example, shares, securities,
bonds and commodities), both
have the objective of maximising
investor returns and both aim
to manage risk. Alternative
investments, however, use nontraditional investment strategies
such as short-selling, derivatives
and leverage to maximise investor
returns (irrespective of whether
the security on which the contract
is based is moving up or down
in price).
www.sanlaminvestments.com | hedge fund capability
Hedge fund strategies
1
2
3
Derivatives are financial products
with value that stems from an
underlying asset or set of asset
classes. These can be stocks,
debt instruments or almost
anything. A derivative’s value is
based on an asset but ownership
of a derivative doesn’t necessarily
mean ownership of the asset.
When you invest using traditional
investment tools, it is all about
buying a share that you think
will increase in value. Once it has
increased in value, you will sell it
for a profit. Selling short is selling
something that you don’t own
(but have borrowed) with the
anticipation that by the time you
need to return it to the lender,
you would have been able to
buy it for a cheaper price.
Leverage uses debt to benefit
from market movements.
Derivatives
Short-selling
Leverage
Why would you choose hedge fund strategies?
Managed Risk
• Increases overall
stability when traditional
investments underperform
• Counteracts market risk
• Has the flexibility and
tools to complement
traditional investments
• Has the ability to generate
returns in falling market
environments
Enhanced Returns
Added diversification
Alternative investments offer flexible asset allocation - get
exposure through responsible leverage. Specialist assets and/or
asset classes offer:
• Low volatility
• High return macro strategies
• Specialist strategies linked to specific:
- Indices
- Assets / stocks
- Currencies
hedge fund capability | www.institutionalimpact.com
11
Globally, the alternative investments market is worth
over US$ 600 trillion.
This is six times the economic output of the world. The majority (92%) of the
world’s largest companies use them as investment tools to help them manage
uncertainty and improve their potential growth.
The scale of the market can have both a positive and negative impact:
Positive impact
•
•
•
•
•
•
•
•
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Sophisticated measurement
Greater transparency
Better regulated
Operational controls
Improved visibility of distortions in
the value (expose and benefit from
incorrect valuations and pricing)
Corrected distortions
Activist investors improve efficiency
for shareholders
Less biased (not owners of the
share / underlying asset)
Negative impact
•
•
•
Could create risk (underlying
systemic risk)
Leverage causes scale that can
create disruptions in the market
Can be viewed as speculative
An overview of
the alternative
investments
market
and the South African context
www.sanlaminvestments.com | hedge fund capability
The South African context in which we operate.
Many local hedge funds now have more than 10 years’ track record and the
industry assets under management are over R60 billion. With this growth has
come increased product understanding and transparency. Risk monitoring
methods and compliance is tightly regulated by the Financial Services Board
(FSB). Hedge funds are approved securities in terms of Regulation 28. In
addition to this, they are open to retail investors via unit trust (collective
investment scheme) fund structures. With broader access to alternative
investments comes a better understanding of the tools we use.
Regulatory controls enhance the integrity of the hedge
fund industry.
Increased regulations mean that there are increasing reporting and disclosure
requirements that promote transparency and monitor and manage
systematic risk.
The legislation separates investor groups into two categories for
their protection:
Qualified Investor Hedge Funds
(Qualified investors)
•
•
Minimum R1 million investment
Demonstrate “knowledge and
experience in financial and business
matters to assess merits and risks”
Retail Investor Hedge Funds
(All investors)
•
Regulatory requirements imposed
on funds are more stringent that
those imposed on Qualified Investor
Hedge Funds.
hedge fund capability | www.institutionalimpact.com
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An overview
of the Sanlam
Alternative
Investments
capability
We design and blend portfolios
using a broad range of alternative
investment tools and strategies
to cater for your specific
requirements. We also offer a
range of strategies that aim to
capture specific sources of return
and protect you against specific
risks (shown in the tables).
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www.sanlaminvestments.com | hedge fund capability
Sanlam Alternative Rho Fund
Sanlam Alternative Xi Fund
Credit Opportunities Fund
FUND / CAPABILITY AND OBJECTIVE
Sanlam Alternative Rho Fund seeks to
deliver maximum risk-adjusted returns
by employing diversified multiple concurrent strategies in primarily South
African interest rate markets. It aims
to generate active alpha by exploiting
market inefficiencies and yield curve
dislocations, regardless of market
conditions or peer performance. The
fund seeks to achieve its investment
objective by positioning in a welldiversified range of different strategies and instruments, expressing
views on the term structure of
interest rates.
Sanlam Alternative Xi Fund seeks to
deliver maximum risk-adjusted total
returns (targeting STEFI+2%). The fund
invests in money market instruments
and exploits arbitrage opportunities
in the front end of the money market
interest rate curve, enhancing returns
with a rated (minimum A-) credit
overlay on the portfolio.
This fund aims to achieve
disproportionate risk-adjusted returns
in all market conditions. With the
introduction of more stringent
regulatory constraints in the banking
industry, the risk appetite of banks
has been significantly curtailed.
This has presented a significant
opportunity for non-banking
institutions such as ourselves to
step in to fill this void. The fund
specifically focusses on identifying
opportunities in the off-market
credit space.
INVESTOR NEED
Investors can benefit from changes to
interest rates and fixed income
exposure. They can hedge the risk of
income yield fluctuations and reduce
the dependency of portfolio returns on
cash returns (driven by interest rates
and inflation).
This fund is for investors who wish to
improve the return on short-term cash
holdings with very little volatility.
This fund is for investors who wish to
enhance their returns by gaining
exposure to credit opportunities in
the unlisted space.
FUND FACTS
Fund inception date:
Fund inception date:
Fund inception date:
October 2004
February 2007
July 2010
Strategy:
Strategy:
Strategy:
Fixed income arbitrage
Listed credit, A- rated and above
Off-market debt
Fund manager:
Fund manager:
Fund manager:
Johan Kurtz
Bruce Simpson
Erica Nell, Jared Abels
Prime broker:
Administrator:
Administrator:
RMB Prime
Maitland
Investment Data Services Group (IDS)
Administrator:
AUM:
AUM:
Maitland
R300 million
R300 million
AUM:
Open to investment:
Open to investment:
R550 million
Yes
Yes
Open to investment:
Yes
hedge fund capability | www.institutionalimpact.com
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Sanlam Alternative
Omega Fund
Sanlam Alternative Pi Fund
S-ALT Yn Fund +
FUND / CAPABILITY AND OBJECTIVE
The Sanlam Alternative Pi Fund aims
to deliver consistent capital growth
irrespective of market conditions. The
fund generates its returns primarily
through equity-based positions listed
on the JSE with auxiliary positions
in offshore markets. The fund strives
to generate a high level of growth
in excess of the benchmark through
carefully selected investments in long
equities, while generating additional
returns through short positioning in
overvalued equities that the manager
anticipates will decline in value.
Our philosophy is to manage the
Sanlam Alternative Omega Fund as a
unified portfolio across fixed income
and equities. Risks are managed for the
purposes of achieving targeted returns
and to reduce portfolio volatility. Risk
management will be the main driver
of the investment decision making
process, considering the multiple risks
the fund takes.
This fund seeks to leverage
positive returns from the changes that
weather, exchange rates, production
cycles and interest rates have on soft
commodity prices.
Risk attribution for each asset class will
be explicitly managed at the strategy
levels and at the overall portfolio levels.
INVESTOR NEED
This fund is for investors who would
like exposure to equities, but with the
added benefit of being able to hedge
out potential losses if/when the market
moves against you.
This fund is for investors who would like
the equivalent of a ‘balanced fund’- with
the risk mitigation tools that alternative
investments use. This strategy is a combination of the fixed income and equity
capabilities.
This fund is for investors who wish
to diversify their portfolio in a very
specific way. They may wish to access
the benefits of changes in the
commodity market through exposure
to energy, wheat, soya, maize, etc.
FUND FACTS
Fund inception date:
Fund inception date:
Fund inception date:
1 May 2014
1 July 2014
1 January 2016
Strategy:
Strategy:
Strategy:
South African long/short equity
Multi-strategy
Fund manager:
Fund manager:
Soft commodities trading
and arbitrage
Greg Bergh
Sithembele Manyadu and
William Ofosu
Prime broker:
Peregrine Securities
Administrator:
Maitland
AUM:
R130 million
Open to investment:
Yes, but early-stage
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Fund manager:
Gert van Wyk
Prime broker:
Prime broker:
RMB Prime
RMB Prime
Administrator:
Administrator:
Maitland
Maitland
AUM:
AUM:
R150 million
R25 million
Open to investment:
Open to investment:
Yes
Yes
www.sanlaminvestments.com | hedge fund capability
hedge fund capability | www.institutionalimpact.com
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sources
of value
and return
Different alternative investment
managers, capabilities and funds
use the sources of return shown
in the following diagramme in
different ways and to different
extents. What is interesting for
investors is that these sources of
return show the extent to which
we have flexible tools to take
advantage of market, industry,
sector and company specific
changes.
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Governance structures ensure
structural alignment of
interests with investors
The way a business and its
investments are structured can
be a fundamental source of value.
When they are structured in a
way that aligns with investors’
interests, it increases the
investment manager’s incentive
to identify and add value.
The most practical example
of this is when the primary
source of compensation is from
performance-based fees rather
than management fees, based
on assets under management.
Another example is if the
business also co-invests in its own
capabilities or funds.
Alignment of interests
(Between investment
managers and clients to
increase the incentive to
identify and add value)
Financial engineering
A rigorous
investment process
(Finding the best way to
take risk and using a range
of instruments to benefit
from views)
(For the best utilisation and
enhancement of capital)
Returns
generated
by alternative
investments
Timing
Leverage
(Keeping a finger on the
pulse of the market and
knowing when to buy or
sell an asset and who to
sell it to)
(Heightened exposure to
opportunities and finding
clever ways to use debt
to increase exposure to
growth)
Risk management
(Checks and balances to
ensure that client interests
are protected - identify,
monitor and manage
investment risk)
hedge fund capability | www.institutionalimpact.com
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the risks
and how we
manage these
General risks of alternative
investments
There are several risks associated
with alternative investments
above and beyond the typical
risks associated with traditional
investments.
Regular investment
monitoring and reporting
• Higher fees – Alternative
investments can have high fees.
• Complexity – Alternative
investment managers may
invest in a wide variety of
investments. Understanding
complicated investment
strategies requires more
upfront and ongoing due
diligence.
• Less liquid – The underlying
investments could be exposed
to lower levels of liquidity in
stressful trading environments.
• It can be challenging to
measure actual risk exposure –
Because alternative
investments are dynamic and
dependent on or linked to
other variables it can be hard
to measure the extent of the
risk to which you are exposed.
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• Hedge funds are often standalone businesses – Not being
linked to large businesses
and brands that have the
operational scale to ensure
risk control processes are
disciplined and robust, means
that smaller businesses can be
exposed to higher operational
risks. This is the most common
cause of hedge fund failure.
How we manage risk
We are an independent business
but because we operate as part of
a conglomerate, the far-reaching
brand implications mean that
our compliance and governance
controls, research and risk
mitigation processes are critical.
The challenge with managing risk
in a dynamic environment is that
one needs transparent access to
information and the operational
platform to measure and
manage this.
We have transparent access to notional
exposure metrics. This includes
snapshots of exposure to:
Our models facilitate measurement
AND enable us to look forward for
scenario testing (of expected exposures).
•
•
•
•
•
• Snapshot in time risk
• Projected risk
• Stressed environment risk
Counterparty credit risk
Asset classes
Instruments
Strategies
Daily returns
We manage risk limits within
carefully considered parameters.
Ongoing and active management is
necessary because the nature of
the market and contracts based on
underlying assets is dynamic. We
actively manage the following:
Over and above this risk analysis,
we focus on:
Counterparty features
• Liquidity analysis
• Pricing analysis
• Valuations
• Rating
• Scale / size
• Exposure
Type of derivative exposure
• Asset class exposure
• Collateral limits / measures /
arrangements
If need be, we can unwind positions,
re-set contracts / exposures, hedge
exposure, transfer positions to others
to ensure that we maintain appropriate
parameter-driven exposure amounts.
We are an
independent
business but we
operate as part of
a conglomerate.
hedge fund capability | www.institutionalimpact.com
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how to take
advantage of
alternative
investments
Take a conservative approach
By definition, alternative
investments use a non-traditional
approach to investing. Therefore,
it is prudent to take a conservative
approach, opting for those
strategies with a proven track
record and stable investment
team and process. With new
products being offered regularly
in this fast-growing space, it is
wise to exercise caution. Consider
businesses that have a solid brand,
proven operational and compliance
controls, and of course, a track
record of demonstrated success.
By definition,
alternative investments
use a non-traditional
approach to investing;
therefore it is prudent
to take a conservative
approach.
What to consider when
choosing a hedge fund
Look at your current portfolio
weightings and consider
• Assessing your concentration
risk and overall correlation
metrics (many investors focus
on manager diversification
only to find that the managers
hold the same underlying
shares)
• Analysis and metrics of the
strategy that will improve
returns and reduce your
specific risk (long vs short)
• Investment views
• Current performance drivers
• Extent of the leverage
• Portfolio construction is
important
- Rebalancing / annual review
- Analysis measurement operational platform
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1. Define your objectives
2. Identify the right strategy
a. Reduce risk
b. Efficient portfolio management
3. Map out benefits and costs
4. Understand the risk
a. Measure
b. Manage
c. Control
5. Ensure the manager has a robust operational procedure
a. Appropriate governance and risk reporting
b. Pricing, executing, booking transactions
c. Measuring and reporting risks and their impact on asset exposure,
liability exposure, liquidity profile and cash flows
d. Operational aspects of derivatives (collateral transfers)
e. Contractual discipline
f. Monitor, measure, manage counterparty risk limits and breaches
g. Regulatory compliance
6. Identify and disclose risk limits
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ü
how to choose
an alternative
investments
manager
a. Skills and proven track record of
strategies and managers
b. Operational platform is critical:
i. Systems
ii. Checks and controls
iii. Qualitative and quantitative metrics
iv. Risk management and
governance framework
v. Understanding of and
compliance with regulatory
framework
vi. Alignment with investor interests
from a fees point of view
vii. Incentive to generate
absolute returns
viii. Transparency and reporting
a.
b.
c.
d.
e.
f.
g.
Credibility
Independence
Trust
Scale / liquidity
Access to resources and research
Autonomy
Strong brand
a. There are a wide range of strategies
b. Different language and terminology
c. Broad and more specific categories
i. Some analyse stocks to look
for mispricing
ii. Some study macro trends
iii. Some fund of hedge funds do
research and analysis for you
and combine the strategies
for you
iv. Long-short strategies
(directional and pairing)
v. Event driven
Questions to ask when choosing a
strategy:
• What will complement your
existing portfolio?
• Is there a specific strategy that
you feel will improve your asset
allocation?
hedge fund capability | www.institutionalimpact.com
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meet
the
team
Our current skills base has an
impressive multi-year and multistrategy skill base across research,
analysis and proprietary trading
environments. This is backed by
extensive experience and industry
connections.
We are incentivised by our
results and invest our money
alongside clients
We continue to invest in people
development, with nine senior
managers in the business with over
133 years’ combined experience.
We offer equity, fixed income,
money market, foreign exchange,
soft commodities and derivative
experience. We do our own
research, trading, price-making,
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money management and risk
management. With the benefit of
having worked within banks, asset
managers, commodity trading
houses and other hedge funds, we
offer a well-rounded capability in
the alternative investments industry.
In addition to this, five junior team
members are currently undergoing
an intensive training programme,
so that we continue to build depth
in the team and reduce key person
risk (which remains a risk in many
boutique businesses).
Social responsibility
and transformation
As part of our transformation
initiative, Sanlam has launched
a three-year graduate training
programme at the start of 2015,
with room on the trading desk
for up to five skilled individuals.
It targets black Masters level
graduates. For the first 18 months,
the trainees study, conduct
research and paper trade and then
they are allocated a small amount
of seed capital to invest in markets.
Each graduate has a senior
member of the team as a mentor.
The intention is for the trainees
to develop a track record of their
own and get a real taste of what
it is like to manage money. They
have the opportunity to do another
18 months of trading, after which
there is the potential to integrate
them into the business.
Bruce Simpson
William Ofosu
CEO
BA (Economics)
Hedge Fund Manager:
Multi-Stategy
BCom
Greg Bergh
Bulent Badsha
Hedge Fund Manager:
Long | Short Equity
MBusSc (Finance), CFA
Erica Nell
Hedge Fund Manager:
Credit
MCom, CA(SA)
Hedge Fund Manager:
Macro Opportunities
BCom
Gert van Wyk
Hedge Fund Manager:
Soft Commodities
MCom (Risk Management)
Sithembele Manyadu
Hedge Fund Manager:
Multi-Stategy
Masters in Management
(Finance and Investments)
Johan Kurtz
Hedge Fund Manager:
Fixed Income
BCom (Hons)
Jared Abels
Hedge Fund Manager:
Credit
BCom (Hons)
hedge fund capability | www.institutionalimpact.com
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what
sets us
apart
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Sanlam Alternative Investments
represents the Sanlam Group’s
commitment to providing investors
with solutions that can help them
grow and protect their wealth,
irrespective of market conditions.
Entrepreneurial flair within
the discipline and scale of a
large group
Sanlam Alternative Investments is
an independent and entrepreneurial
business unit that sits within Sanlam
Investments. As an institution,
Sanlam has long been a supporter
of alternative strategies. The
strategic alignment of a number of
alternative investment strategies
and capabilities within one business
represents a firm commitment
to consolidating, growing and
developing the intellectual base,
range of strategies and access to
alternatives for investors within
the Sanlam Group and via external
distribution networks.
Operational excellence, better
risk controls and governance
Being part of one of the largest
financial services providers in
Africa has great benefits for the
business. They leverage off the
group for legal, compliance, HR,
operations and IT, and also have
access to scrip lending agreements
and fundamental and qualitative
research. The compliance team
monitors portfolios daily.
Access to ideas, research
and relationships
We have access to third-party
research, flow information and
trade idea generation because
we are part of a large group of
businesses. Trades are executed
independently, with managers
receiving fair pricing and liquidity
from the market due to them being
part of a greater group.
A long-term view and a focus
on performance
We have access to seed capital and
financial backing from the Group if
necessary, to invest in intellectual
capital, and build sustainable
business cases for different
strategies. This is an important
differentiator, because managers
are able to take the time to make
the right decisions and concentrate
on performance, rather than be in a
rush to raise assets or buy and sell
instruments for liquidity.
An active approach to the
benefits of transformation
Sanlam’s strategic plan for the
business includes a significant
transformation component, with a
goal to reflect South Africa’s multiracial make-up. We believe that
there is a significant advantage to
partner with, develop and mentor
the right talent.
Alternative investments sit
alongside traditional active
and passive strategies
From an investor point of view,
we believe that every active and
passive portfolio should make
use of the extended set of tools
that we have available to ensure
that returns are not dependent
on markets only going up. But
in spite of this, we treasure our
independence and ability to be
entrepreneurial. Managers have
the freedom to express their own
views and run their own strategies,
but with a high level of risk and
operational oversight.
hedge fund capability | www.institutionalimpact.com
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Sanlam Alternative
Investments
represents the Sanlam
Group’s commitment
to providing investors
with solutions that can
help them grow and
protect their wealth,
irrespective of market
conditions.
The Sanlam Investments
business incorporates the
Sanlam Group’s investmentrelated businesses, ensuring
that all business practices and
performances are aligned. The
business is diversified across
a broad range of specialist
investment businesses. Its
areas of expertise include
conventional asset management,
alternative investment solutions,
collective investment schemes,
employee benefits, property
asset management, private
client investment management
and stock broking, multimanagement, structured
products (including guaranteed
products) and private
equity funds.
Sanlam Investments has, over
a period of time, incorporated
a number of businesses that
function across the financial
services value chain. The result
is a diverse range of businesses
which has enabled us to develop
a range of products and solutions
aimed at meeting the needs
of our increasingly diverse
client base.
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www.sanlaminvestments.com | hedge fund capability
With more than R780 billion
in assets under management,
Sanlam Investments is one of
the largest asset managers in
South Africa. We offer clientfocused solutions based on
a comprehensive range of
investment portfolios, namely
unit trusts, life pooled portfolios
and segregated portfolios for
third-party institutional and retail
clients, as well as the Sanlam
Group. We manage portfolios
for retirement funds, long-term
insurers, short-term insurers,
medical schemes, municipalities,
university endowment funds,
charities, mining rehabilitation
funds, trusts and offshore clients.
Portfolios are managed by
multi-specialist investment
teams who share a common
research platform and offer the
following capabilities: equities,
fixed interest, balanced funds,
absolute return funds and
liability-driven funds. These
teams interact, share ideas
and engage in robust debate,
ensuring that the investment
ideas generated are a result
of the interaction of a variety
of investment professionals
with rich and diverse skills and
backgrounds. A key contributor
to our performance is having
access to a formidable and
comprehensive research base and
systems, with teams devoted to
asset allocation, macro-economic
and equity research. We believe
investment performance is the
outcome of many factors and
that the team has successfully
combined all of these to deliver
strong performance across the
entire investment range.
Sanlam
Investments
– a shared
platform
that enables us to meet
client-specific needs
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31
why Sanlam
alternative
investments?
Passive
Alternative
investments
Active
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www.sanlaminvestments.com | hedge fund capability
We are committed to
improving lives
We recognise that the money we
manage represents hard work,
endeavour and aspirations. If you
represent retirement fund members
or a non-profit organisation, we
appreciate that the money needs to
be there in the long run to enable
members to retire with dignity, and
for organisations to fulfil important
missions. We understand what’s
at stake. That’s why we work to
deliver real, lasting value. And
that’s why we’re committed to our
purpose: improving the lives of
our clients.
We are backed by a leading
industry brand that gives
clients peace of mind
It also gives us support in the
form of a strong, disciplined and
scalable business platform. Our
senior management team have
proven expertise and a great
track record. We have an active
talent development programme
to diversify our team and give
opportunities into the next
generation.
Being part of a diversified business
gives us the benefits of scale, but
as a relatively small team we are
independent, entrepreneurial
and incentivised to develop
innovative solutions for clients’
investment needs.
We make money out of risk
and we only make money
when we make money for you
We have developed a compelling
alternative investment capability
to operate in a complementary
way to traditional investments.
This is because we believe that
for true diversification, alternative
investments should form a part
of every investment portfolio. It
is like dynamic insurance for your
investment portfolio.
We offer a broad range of
capabilities for institutions
and individuals
Our objective is to bring together
the best alternative investments
in multi-manager portfolios and
leverage our investment research
capabilities to provide innovative
solutions to client needs. We
provide alternative investment
solutions to a range of clients and
our capabilities in the hedge fund
space are broad.
An alternative approach to
active management
We have the tools, expertise, skills,
track record and incentive to take
advantage of opportunities and
mitigate against the risks inherent
in traditional ‘long-only’ active and
passive strategies.
hedge fund capability | www.institutionalimpact.com
33
leading
broad-based
financial services
group
Sanlam Emerging
Markets
Group Office
Sanlam Personal
Finance
SA Retail: life insurance,
investment & other
financial services
Emerging markets ex-SA:
life insurance, general
insurance, investments,
credit & banking
Sanlam
Investments
Sanlam Group
SA & developed markets:
investment management,
wealth management,
credit & structuring
Sanlam
Corporate
SA & EM corporate:
employee benefits,
health
Santam
General insurance
in SA & co-investor
in SEM general
insurance businesses
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www.sanlaminvestments.com | hedge fund capability
United Kingdom
Ireland
Switzerland
USA
Equities Manager of the Year
2016
Equities
Manager
of the year
India
The Gambia
Philippines
Ghana
Uganda
Kenya
Rwanda
Burundi
Nigeria
Malaysia
Tanzania
Malawi
Zambia
R787 bn
Mozambique
Zimbabwe
Namibia
Botswana
Swaziland
Lesotho
South Africa
Australia
Sanlam is a leading
broad-based financial
services group
in South Africa
Sanlam is a leading broadbased financial services group
in South Africa. In nine decades
Sanlam has set benchmarks for
wealth creation, innovation and
empowerment in South Africa.
Sanlam has offices throughout
South Africa as well as business
interests elsewhere in Africa,
Europe, India, Malaysia, Australia
and the USA. The Group’s
international footprint
is illustrated above.
Sanlam provides financial
solutions to individual and
institutional clients. These
solutions include individual,
group and short-term insurance,
personal financial services such
as estate planning, trusts, home
and personal loans, savings and
linked products, investment, asset
management, property asset
management, stockbroking, risk
management and capital market
activities. Sanlam provides these
solutions to various segments of
the markets where it operates
and offers the solutions from a
number of mutually dependent
business entities in the Group.
From a life insurance company
established in 1918, Sanlam has
grown into a diversified one-stop
financial services group, offering
its clients a journey for life for
their financial needs.
hedge fund capability | www.institutionalimpact.com
35
2016/08/V2
The Sanlam Group is a full member of the Association for Savings and Investment SA. Sanlam Investments consists of
the following authorised Financial Services Providers: Sanlam Investment Management (Pty) Ltd (“SIM”), Sanlam Multi
Manager International (Pty) Ltd (“SMMI”), Satrix Managers (RF) (Pty) Ltd, Graviton Wealth Management (Pty) Ltd
(“GWM”), Graviton Financial Partners (Pty) Ltd (“GFP”), Radius Administrative Services (Pty) Ltd (“Radius”), Blue Ink
Investments (Pty) Ltd (“Blue Ink”), Sanlam Capital Markets (Pty) Ltd (“SCM”), Sanlam Private Wealth (Pty) Ltd (“SPW”),
Sanlam Credit Fund Advisor Proprietary Limited, Sanlam Africa Real Estate Advisor Proprietary Limited and Sanlam
Employee Benefits (“SEB”), a division of Sanlam Life Insurance Limited; and has the following approved Management
Companies under the Collective Investment Schemes Control Act: Sanlam Collective Investments (RF) (Pty) Ltd (“SCI”)
and Satrix Managers (RF) (Pty) Ltd (“Satrix”). The full details and basis of the awards are available from the Manager.
Collective investment schemes are generally medium- to long-term investments. Please note that past performances
are not necessarily an accurate determination of future performances, and that the value of investments may go down
as well as up. A schedule of fees and charges and maximum commissions is available from the Manager. Additional
information can be obtained from the Manager, free of charge. Collective investments are traded at ruling prices and
can engage in borrowing and scrip lending. Collective investments are calculated on a net asset value basis, which is
the total market value of all assets in the portfolio including any income accruals and less any deductible expenses such
as audit fees, brokerage and service fees. Actual investment performance of the portfolio and the investor will differ
depending on the initial fees applicable, the actual investment date, and the date of reinvestment of income as well as
dividend withholding tax. Forward pricing is used. The Manager does not provide any guarantee either with respect to
the capital or the return of a portfolio. The performance of the portfolio depends on the underlying assets and variable
market factors. Performance is based on NAV to NAV calculations with income reinvestments done on the ex-div date.
Lump sum investment performances are quoted. The portfolio may invest in other unit trust portfolios which levy their
own fees, and may result is a higher fee structure for our portfolio. All the portfolio options presented are approved
collective investment schemes in terms of Collective Investment Schemes Control Act, No 45 of 2002 (“CISCA”). The
fund may from time to time invest in foreign instruments which could be accompanied by additional risks as well as
potential limitations on the availability of market information. The Manager has the right to close any portfolios to new
investors to manage them more efficiently in accordance with their mandates. The portfolio management of all the
portfolios is outsourced to financial services providers authorized in terms of the Financial Advisory and Intermediary
Services Act, 2002 (FAIS). This publication is intended for information purposes only and does not constitute financial
advice as contemplated in terms of the FAIS Act. International investments or investments in foreign securities could be
accompanied by additional risks, such as potential constraints on liquidity and the repatriation of funds, macroeconomic
risk, political risk, foreign exchange risk, tax risk and settlement risk, as well as potential limitations on the availability of
market information. Use or rely on this information at your own risk. Independent professional financial advice should
always be sought before making an investment decision.
55 Willie van Schoor Avenue, Bellville 7530
Private Bag X8, Tyger Valley 7536, South Africa
T: +27 (0)21 950 2600
F: +27 (0)21 950 2126
[email protected]
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www.sanlaminvestments.com | hedge fund capability