30 April 2021
ALTERNATIVE INVESTMENTS SUPPLEMENT loss and maximises the probability of real returns over the long term.
7 things you should know about the 36ONE Hedge Funds BY STASH MARTINS Investment Consultant, 36ONE Asset Management
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6ONE Asset Management has a 15-year track record of managing hedge funds and is currently the largest hedge fund manager in the country. Our primary hedge funds are the 36ONE SNN QI Hedge Fund (QIHF) and 36ONE SNN Retail Hedge Fund (RIHF). 1. What are the main differences? In terms of investment strategy, the two are mirrors of one another. Key differences include: Investor type Inception date
36ONE QIHF Available to qualified investors 01 April 2006
36ONE RIHF Available to all investors
01 December 2008 November 2016 (CISCA Inception) Investment R1 000 000 Lower investment minimums (regulation stipulated) minimums, dependent on provider Frequency of liquidity Monthly Daily and pricing 2. What is an equity long/short strategy? This strategy predominantly generates its returns from positions in equity markets. This style of investing has historically produced equity-like returns with substantially
less volatility than traditional equity unit trust strategies over the long term. The 36ONE QIHF has returned on average 16% p.a. since its inception after fees. Importantly, not only has the volatility been 55% lower compared to the market (ALSI), but it has also experienced much lower drawdowns during the period. 3. What do these funds invest in? These funds are diversified and invest in South African and offshore equity markets, as well as other financial instruments (such as cash and derivatives) to enhance returns and, importantly, to manage risk. 4. What are the objectives and who is best suited for these funds? Capital preservation is key to these funds’ objectives. They aim to outperform cash and generate absolute returns over the long term, regardless of market direction. Investors looking to grow their capital in real terms over time, while significantly reducing the volatility associated with investing in equities, are best suited for these funds. 5. Are they available in retirement products? Yes, Regulation 28 allows for a maximum of 10% in total to be allocated to hedge funds. We believe that hedge funds should form part of an investor’s investment portfolio, as a diversified portfolio limits the risk of permanent capital
6. A few benefits of investing in these funds include: • Increases diversification: The bi-directional strategy (from the long and short positions combined) means that we can generate returns in both upward and downward trending equity markets. The ability to go long and short broadens the portfolios’ ability to exploit a larger opportunity set. • Improves risk-return profile: Not only can these funds generate profits from their long and short positions, but the short positions act to reduce market exposure. This can provide an element of protection (or hedge) when markets decline because the gains on short positions will offset the losses on long positions. • Combats portfolio longevity: Our funds can reduce portfolio volatility and, in turn, play a role in keeping clients invested through market cycles, due to substantially lower drawdowns. 7. Fund accessibility The 36ONE RIHF is available via Sanne (our Manco) and also via certain LISP platforms. For more information on how to access our funds, please contact us. Disclaimer: Bloomberg, Sanne as at 28 February 2021. Past Performance is not necessarily an indication of future performance. 36ONE SNN QIHF CISCA inception date is 01 November 2016. Sanne Management Company is registered and approved by the FSCA under CISCA, and retains full legal responsibility for the third-partynamed portfolio. 36ONE QIHF Highest and lowest rolling 12-month performance since inception: High 58.63%; Low -10.84%. 36ONE RIHF Highest and lowest rolling 12 month performance since inception: High 18.84%; Low -2.01%. Full mandatory disclosures can be obtained on our website by following this link: https://www.36one. co.za/legal/disclaimer 36ONE Asset Management Pty Ltd is a licensed financial service provider. FSP# 19107
R9 221 600
HAVE YOUR INVESTMENTS PERFORMED LIKE THIS? The 36ONE SNN QI Hedge Fund has returned an average of 16% per annum since inception in April 2006
R3 770 200
R1 000 000
April 2006
April 2013
February 2021
Disclaimer: Collective Investment Schemes in securities and hedge funds are generally medium to long-term investments. The value of participatory interests may go up or down and past performance is not necessarily an indication of future performance. Sanne Management Company (RF) (Pty) Ltd, (“Sanne”) (“the Manager”) is registered and approved in terms of the Collective Investment Schemes Control Act 45 of 2002. The Manager does not guarantee the capital or the return of a portfolio. Collective Investments are traded at ruling prices and can engage in borrowing and scrip lending. A schedule of actual annual returns, fees, charges and maximum commissions is available on request. 36ONE Asset Management (Pty) Ltd (“36ONE”) reserves the right to close and reopen certain portfolios from time to time in order to manage them more efficiently. The Manager ensures fair treatment of investors by not offering preferential fee or liquidity terms to any investor within the same strategy. Additional information, including application forms, annual or quarterly reports can be obtained from 36ONE, free of charge. Performance figures quoted are from Bloomberg and Sanne as at the date of this report for a lump sum investment, using NAV to NAV with income reinvested and do not take any upfront manager’s charge into account. Income distributions are declared on the ex-dividend date. Actual investment performance will differ based on the initial fees charge applicable, the actual investment date, the date of reinvestment and dividend withholding tax. Annualised return is the weighted average compound growth rate over the period measured. Sanne retain full legal responsibility for third party named portfolios. Highest and lowest rolling 12 month performance since inception (as at 28 February 2021): Highest - 58.63% and Lowest - 10.84%. CISCA inception date: 1 November 2016. 36ONE Asset Management (Pty) Ltd. is a licensed financial service provider. FSP# 19107.
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