How would you describe your investment philosophy as it pertains to managing
hedge funds?
We follow a fundamental, bottom-up investment approach grounded in valuation, identifying assets trading at a meaningful discount to intrinsic value and exiting as that gap closes. The hedge fund structure expands our opportunity set, allowing us to take both long and short positions and generate returns regardless of market direction.
Our edge lies in identifying superior and inferior businesses and management teams and translating that into expected returns. We combine rigorous analysis with a focus on more complex or under-researched opportunities where mispricing is more likely.
What process do you follow to decide what instruments to invest in?
Our process centres on a well-defined universe of companies we understand and can forecast with confidence. Two analysts cover each company to test both the bull and bear case. We build valuation models, estimate expected returns and rank opportunities within a central system.
Ideas are sourced from existing coverage and new opportunities, prioritised based on risk-adjusted returns. Position sizing reflects expected return, conviction, liquidity and downside risk. We remain unconstrained by benchmarks and focused on highest-conviction ideas.
Strong ideas combine a clear business model, predictable earnings, a discount to intrinsic value and a clear reason for mispricing. Decisions are made by consensus among portfolio managers, supporting consistency and discipline.
How do you manage hedge fund risk?
Risk management is integral to our approach. By focusing on businesses we understand and can value with confidence, we aim to reduce uncertainty at the source.
At the portfolio level, risk is managed through disciplined position sizing, valuation review and active monitoring of exposures. Positions are assessed against fair value, with clear processes to reassess or exit as the investment case changes. A structured stop-loss framework ensures underperforming positions are reviewed, while directional risk is managed through short positions and put options, supported by robust systems and oversight.
What are your strategies for hedging against market downturns?
Our hedging toolkit includes short positions in overvalued stocks, short exposure to equity indices and the use of put options when tail risks appear underpriced. We reassess the portfolio as conditions change, adjusting exposures and introducing hedges where appropriate to limit drawdowns and preserve capital.
How do you measure your investment performance?
We assess performance in risk-adjusted, absolute terms, net of fees, over meaningful time horizons. Metrics such as volatility, maximum drawdown and consistency are central. Ultimately, the key question is whether investors are better off after fees.
What is your track record, and how have your funds performed across market cycles?
The High Growth Fund* has delivered strong long-term returns since inception in February 2000, with R1-million growing to well over R100-million. Over the past 15 years, it has returned 16.7% per annum versus 9.2% for the ASISA SA Multi-Asset High Equity category.
The Pure Hedge Fund** has produced consistent returns with materially lower volatility and has not experienced a negative year in its nearly 28-year history. Both strategies have demonstrated resilience across multiple cycles, including the Global Financial Crisis and the Covid-19 pandemic.
How would you describe the culture in your business?
Our culture is meritocratic, collaborative and owner-managed. Responsibility and opportunity are aligned with performance and capability, while open debate underpins decision-making. Our interests are aligned with clients, supporting a long-term mindset and disciplined execution.
About ANNE HOLDING | Anne joined Peregrine Capital in 2020 and is responsible for distribution and investor and advisor relations in KwaZulu-Natal. She commenced her career in 2014 at Marriott Asset Management as a member of the Operations Team, responsible for nationwide support to financial advisors and investors for all Marriott products. Anne ended her time with Marriott as an Investment Consultant for the KZN and Eastern Cape regions. In this role, she was primary liaison to financial advisors, with the duty of educating and training advisors in the Marriott investment philosophy and product offering, resolving concerns and advancing the business’ image.
Peregrine Capital Proprietary Limited is an authorised financial services provider. Past performance is not indicative of future performance. Peregrine Capital Collective Investments (RF) Proprietary Limited is an approved manager of collective investment schemes in terms of the Collective Investment Schemes Control Act, 2002. The value of participatory interests may go down as well as up. Performance figures are quoted on a NAV-to-NAV basis, net of fees, with income reinvested. The illustrative growth of R1 million since inception is for illustrative purposes only and is calculated taking actual initial fees and all ongoing fees into account, with income reinvested on the reinvestment date. The 15-year annualised return of 16.7% per annum is compared against the ASISA South African Multi-Asset High Equity category average of 9.2% per annum as at 31 March 2026. Category comparison figures are sourced from Morningstar, Bloomberg and are based on lump sum. Collective investment schemes are generally medium- to long-term investments. *Refers to the Peregrine Capital High Growth QI Fund. R1m invested at inception is worth more than R197.9m today, High Growth Fund annualised return: 22.39% Data to 31 March 2026 | all since inception (February 2000). ** Refers to the Peregrine Capital Pure Hedge QI Fund. Pure Hedge Fund annualised return: 18.41% R1m invested at inception is worth more than R108.7m today, Data to 31 March 2026 | all since inception.
