Johannesburg-based Laurium Capi¬tal achieved two significant milestones this month, with the Laurium Zambezi Fund passing the one-year hurdle and its Laurium Capital sub-Saharan African Fund reaching the two-year mark Laurium’s Zambezi Fund offers access to the nascent economic recovery in Zim¬babwe. It has gained a net 31.7% in the 12 months since inception last December, against an index return of 2%. A predomi¬nantly a long fund that invests in equities listed on the Zimbabwe Stock Exchange, it has a flexible and broad mandate to exploit other opportunities. The fund has $11 million under management and will be capped at $20 million to preserve the opportunity set. Laurium’s sub-Saharan fund, which has significant scale to grow given the markets it invests in, has gained 43.3% since incep¬tion, or a net 19.7% per annum. A long/ short fund focused mainly on sub-Saharan African equities, it is predominantly invested in South African listed stocks with net exposure to countries outside of South Africa limited to 25% of net asset value. The portfolio can include related strategies in preference shares, bonds, convertibles and other derivatives. Laurium’s long short strategy is based on fundamental bottom-up research with a value bias, to create a concentrated but con¬servative portfolio that aims for a real return in excess of 15% per annum on a rolling three-year basis with low correlation to equity markets. The fund currently has $16 million of funds under management. The South African portion of the sub-Saharan fund mirrors Laurium’s domestic hedge fund, the Laurium Capital Alternative Investment. The strategy launched in August 2008 and has gained 37% since then against an index return of 10% for the same period. The rand-based fund has R350 million under management. Laurium, headed by former Deutsche Bank pair Murray Winckler and Gavin Vorwerg, has grown steadily since launch in late 2008 and now has assets under management of around R650 million across its four funds. The fourth fund in the stable is the Bell Rock Fund, a market-neutral equity fund focused on the South African markets that is managed by Craig Sorour and Sven Thord¬sen. The fund has been a strong performer since its launch in January 2009 returning 35% with only one down month. Winckler says the team remains fairly upbeat on opportunities in the markets. He expects returns of around 15% from South African stocks next year which, with inflation at around 5%, should see real returns of about 10%, driven largely by earnings. Sub-Saharan returns outside of South Africa are expected to be superior to those of South Africa in 2011, given attractive valuations and growth prospects.
© HedgeNews Africa – December 2010. Download PDF