SouthernCross Capital, based in Paarl, Western Cape, was founded by Cobus Potgieter and Wilhelm Landman who have spent their entire careers in hedge fund management. The company is 100% owner-managed and has an AUM of R450-million, broken down into R350-million hedge fund and long-only R100-million.
Client profile
Our typical client profile is a split between financial advisors, advisor-driven cat IIs, DFMs and institutional multi-managers.
Meet the team
The team at SouthernCross Capital is made up of four key individuals. The management team consists of the founders, Wilhelm Landman and Cobus Potgieter, both of whom have extensive experience in investment.
The investment team also consists of the two founders alongside Pieter Slabbert, who supports the portfolio managers through investment research, financial modelling and quantitative analysis. He has a BCom Honours in actuarial science from Stellenbosch University where he is pursuing a Master’s.
Emily Wright is the final member of the team. She is a qualified chartered accountant (CA) who graduated from Stellenbosch University. At SouthernCross, she oversees financial strategy and operational efficiency, bringing strong analytical skills and international experience.
Investment philosophy
SouthernCross Capital believes that distortions related to differing mandates, views, indexing and sentiment will consistently cause markets to be inefficient. We also hold that there is excess absolute return to be extracted in providing liquidity to these divergent market participants while always remaining anchored in the fundamental value of the underlying asset. SouthernCross Capital seeks to exploit these opportunities in isolation, controlling for exogenous risks to generate alpha over and above expected returns.
Products and benefits
The inclusion of a SouthernCross hedge fund to a portfolio offers several benefits:
- The hedge funds tend to deliver superior returns for less risk relative to traditional investments.
- SouthernCross hedge funds have a history of delivering positive returns during periods of turmoil, as the equity arbitrage opportunities that the investment team specialise in excel when there is blood in the streets.
- The hedge funds are uncorrelated to the other components of the portfolio, offering the truest diversifier readily available to the end investor.
- Given the low rate of adoption to date, hedge funds are one of few tools available to advisors to enhance their offering relative to their peers that are slower to adapt.
Process to develop and implement investment solutions
We offer funds where we believe we have an edge over the broader market and as such, we offer the low equity SouthernCross NCIS Market Neutral Hedge Fund, medium equity SouthernCross Prescient Multi-Strategy Hedge Fund and SA high equity SouthernCross BCI Equity Fund. Our particular expertise is in equity arbitrage, where we generate returns by exploiting relative differences in equity instruments without assuming market risk.
Process for servicing clients
Because we are boutique and small we are able to grant our limited number of clients extraordinary engagement and are able to work with clients to develop products they require.
Different types of funds offered
- Market Neutral Hedge Fund
- Multi-Strategy Hedge Fund
- SA Equity Fund
The investment team has hedge funds in their blood. Even though SouthernCross offers a traditional equity fund, the hedge funds are the flagship products. The equity fund is managed through the lens of a hedge fund with various market-neutral strategies ported on top of an equity benchmark.
Performance Market Neutral
- 8.96% per annum since inception.
- 11.31% per annum over the past 3 years.
- 8.84% per annum over the past 5 years.
- 86% positive months since inception.
- Low volatility absolute returns, few drawdowns and no negative 12-month period since inception.
Multi-Strategy
- 15.31% per annum since inception.
- 17.75% per annum over the past 3 years.
- Significant outperformance of Capped Swix (15.86%) and ASISA MA High Equity (13.35%) with reduced levels of volatility without experiencing a negative 12-month period since inception.
