Established in 2017, Rozendal Partners is an independent investment management firm based in Cape Town. The company places great value on the partnership between the firm and their investors, with a focus on closely aligning their interests to ensure a steadfast commitment to long-term investment excellence.
Who we are
Our business was founded by Wilhelm Hertzog and Paul Whitburn. Wilhelm is a chartered accountant and CFA Charterholder and Paul obtained an honours degree in Finance and Portfolio Management and has attended an executive programme in Value Investing at Columbia University. Wilhelm and Paul co-manage the Rozendal funds. They are seasoned investment managers with extensive experience in the South African and global equity markets.
Investment philosophy
At Rozendal Partners, we employ a disciplined, valuation-based investment process to identify compelling local and global opportunities, predominantly in equity markets. Our goal is to compound capital at high rates over long periods while limiting the risk of loss to prudent levels. Our funds are managed using a multi-counsellor approach, ensuring our investors benefit from the collective expertise and experience of our portfolio managers.
Investment process
Our investment ideas stem from staying attuned to market developments, extensive reading and maintaining a somewhat contrarian mindset. Our investment process is designed to provide our portfolio managers with the best possible environment to apply sound judgement and make informed, rational decisions. By fostering such an environment, we enable our managers to take a long-term view, free from short-term psychological pressures. This approach distinguishes us from others: rather than merely observing market opportunities, we are able to actively implement sensible investment strategies.
Our team has first-hand experience dealing with the pressures that often lead investors astray. This experience equips us to better handle such pressures in the future, allowing us to stay true to our investment philosophy. We understand that true value is built over time and therefore look to foster relationships with like-minded financial advisors and investors to build lasting wealth together.
Product offerings
We manage two funds: the Rozendal Worldwide Flexible Prescient QI Hedge Fund, which provides investors with our best investment view, across local and global assets in a single fund. Additionally, we manage the Rozendal Global Fund, denominated in USD, as well as a ZAR-denominated feeder version for investors looking to invest globally in rands. Both our funds are managed under flexible mandates, predominantly equity-focused and aim to capitalise on investment opportunities across all asset classes and sectors.
Hedge fund offered
Rozendal Worldwide Flexible Prescient QI Hedge fund.
Contact information:
• Wilhelm Hertzog/Paul Whitburn
• Telephone: 021 286 6716
• Email: info@rozendal.com
• Website: www.rozendal.com
A long-term perspective
Rozendal Partners is willing to explore parts of the market that others often overlook or avoid completely, creating value for you. Blue Chip asked Paul Whitburn and Wilhelm Hertzog to share some insight into the company.
How would you describe your investment philosophy?
We employ a valuation-based investment philosophy. Our objective is to identify mispriced assets by consistently looking at areas of the market where the likelihood of mispricing is higher than average. While our approach is somewhat contrarian, we only take such positions where true mispricing occurs. We dedicate our efforts to understanding each investment opportunity well enough to make a reasonable estimate of its fair value.
What process do you follow to decide what instruments you will invest in?
Our investment ideas mainly arise from being aware of developments in markets, reading widely and maintaining a somewhat contrarian mindset. We tend to find opportunities in areas of markets towards which there is clearly visible aversion by the general market, which is being ignored, has been neglected or which is more complicated to analyse and requires deeper research than what the average market participant is willing to engage in. We rarely screen markets systematically but do so when we are building an understanding of a market with which we are not yet familiar. As fundamental, valuation-based investors, the main objective of our research process on a new idea is to determine a reasonable estimate of fair value for the asset in question. If we believe this is achievable, we compile a research report that demonstrates our understanding of the asset’s economics, outlines why it may be mispriced and explains how our valuation differs from the market’s. The investment team then reviews the report and if approved, the asset is added to our investable universe.
What do you see as your competitive advantage?
We see our edge as primarily behavioural. We’re willing to explore parts of the market that others often overlook or avoid completely. Thanks to our stable, longterm capital base, we can take a genuinely long-term view of the assets we invest in. By investing alongside our clients, in funds with flexible mandates, we aim to align our interests to that of our investors while eliminating short-term noise, emotion and certain behaviours that can detract from true value creation.
How do you manage risk in your hedge fund(s)?
Risk management starts within our investment process through our analysis and understanding of an asset’s fair value and buying assets at a significant discount to our estimate of fair value. Furthermore, appropriately sizing our investments and maintaining a diversified overall portfolio further reduces risk within our fund. The flexibility of using a hedge fund structure further allows us to employ certain strategies to hedge against adverse macroeconomic, currency and specific risks that may present themselves from time to time.
What has been your biggest mistake in managing your hedge fund(s)?
A common challenge with value investors is the tendency to be early, both in buying and selling assets, which can significantly detract from long-term performance. Over time, we have increasingly come to incorporate factors like momentum, insider activity and the presence or absence of catalysts in our portfolio construction.
What are your typical holding periods?
We invest with a long-term perspective, often holding investments for several years. Our fund therefore typically exhibits low turnover; however, changes in our investment thesis or conditions that significantly alter an investment’s economics may change our investment timeframe.
What is your track record?
Our hedge fund has shown resilience across different market cycles and built a solid track record. Being valuation-based investors, the Rozendal Worldwide Flexible Prescient Qualified Investor Hedge Fund (A class units) has delivered an annualised return of 12% since its inception in February 2018.
| About Paul Whitburn Paul graduated with a BCom Accounting degree from Stellenbosch University before completing his BCom Honours degree in Finance and Portfolio Management (Cum Laude) from the University of Cape Town. He was a founding partner at BlueAlpha Investment Management managing long/short equity hedge funds and long-only mandates. Paul then attended an executive programme in Value Investing at Columbia University and has followed that investment philosophy ever since. He then joined RECM as an analyst and finally as a portfolio manager, building further on his investment experience. Paul enjoys travelling the world meeting companies and experts to uncover investment opportunities. He also enjoys spending time cycling and on family beach holidays. Rozendal Partners fulfils his life-long dream of building a great company with his partners. |
| About Wilhelm Hertzog When Wilhelm’s father bought him a few shares in a company as a young boy, Wilhelm spent days trying to figure out the physical size of the piece of the business he owned. Wilhelm’s understanding of investments has come a long way since then, although he still finds certain market developments baffling. Despite taking Latin and not accounting at school to study law, Wilhelm eventually qualified as a Chartered Accountant and obtained the CFA charter. He then spent 12 years working alongside some of the most renowned capital allocators in South Africa, first at PSG Group and then at RECM. After gaining incredible experience, Wilhelm joined likeminded partners to found Rozendal Partners. Wilhelm has a very wide field of interests, and predictably enough spends very little time pursuing most of these. But his first loves are his family and allocating capital, and he manages to find ample time for those. |
Collective Investment Schemes in Securities (CIS) should be considered as medium-to-long-term investments. The value may go up as well as down and past performance is not necessarily a guide to future performance. CISs are traded at the ruling price and can engage in scrip lending and borrowing. A schedule of fees, charges and maximum commissions is available on request from the Manager. A CIS may be closed to new investors in order for it to be managed more efficiently in accordance with its mandate. Performance has been calculated using net NAV to NAV numbers with income reinvested. There is no guarantee in respect of capital or returns in a portfolio. Prescient Management Company (RF) (Pty) Ltd is registered and approved under the Collective Investment Schemes Control Act (No.45 of 2002). For any additional information such as fund prices, fees, brochures, minimum disclosure documents and application forms please go to www.prescient.co.za. The Rozendal Global Fund is registered and approved under section 65. A Feeder Fund is a portfolio that invests in a single portfolio of a collective investment scheme which levies its own charges, and which could result in a higher fee structure for the feeder fund.
