Dear Clients, Staff, Partners, and Stakeholders,

It is always a pleasure to ‘talk’ to you through our monthly edition of Warwick Wealth Matters.

September saw the addition of several talented individuals to our team, and it gives me great pleasure to welcome them all into the Warwick family. In Cape Town, Micaela Smith joins us as a Client Relationship Officer and Joshua Lubbe as a Client Relationship Specialist. In Johannesburg, Anrico Blignaut has joined as a Wealth Specialist, while in Bloemfontein we are delighted to welcome Dané Snyman as a Client Relationship Officer and Mia Barnard as a Client Relationship Specialist.

We are also thrilled to announce the addition of several highly experienced partners. Yetta Brooke and Hennie Swanepoel join us in Gauteng, Gerard Rogers in the Eastern Cape, and Elise van der Waal in KwaZulu-Natal. Collectively, they bring decades of experience, professionalism, and client dedication to Warwick, and we very much look forward to the contributions they will make as we continue to expand our national footprint.

Demystifying hedge funds for private clients

In this month’s edition, I would like to turn our attention to hedge funds, an area of investing that has traditionally been seen as exclusive and out of reach for most investors. For many years, hedge funds required large initial investments and were only accessible to “qualified investors.” However, in recent years this has changed dramatically.

Today, many of South Africa’s most reputable hedge fund managers have launched retail investor funds. These funds can be accessed via the large, linked investment platforms (LISPs) and, importantly, are traded daily. This means investors are able to view the value of their investment and transact on a daily basis, rather than monthly or quarterly as was the norm in the past.

So, what exactly is a hedge fund? Put simply, a hedge fund is an investment vehicle that uses a variety of strategies to generate returns under different market conditions. These strategies can include long and short positions, derivatives, and other alternative approaches. While the word “hedge” often creates the impression of high risk, hedge funds are not inherently riskier than other investments. The level of risk depends on the specific strategy applied by the manager. In fact, many hedge funds are designed with the aim of reducing portfolio risk by protecting capital in periods of market volatility.

Why, then, would clients consider investing in hedge funds? The answer lies in diversification. Hedge funds have the ability to behave differently from traditional equity and bond markets. At times when markets are falling, hedge funds may rise or, at the very least, hold steady, thereby reducing the overall volatility of an investor’s portfolio. In this way, hedge funds can help smooth the investment journey, offering clients a more balanced experience and reducing the likelihood of sharp drawdowns.

At Warwick, we believe hedge funds can play a valuable role within a diversified portfolio. We approach them with measured allocations, however, mindful of both the costs and the benefits they bring. It is for this reason that we have recently launched our very own Warwick Hedge Wrap Fund, giving our clients structured access to this important asset class.

Should you wish to learn more about how hedge funds might complement your portfolio, I encourage you to contact your dedicated Warwick Wealth Specialist, Planner, or Advisor, who will be delighted to provide further guidance.

As always, I extend my heartfelt thanks to each of you—our clients, staff, partners, and stakeholders—for your continued support and trust in Warwick. It is through these strong relationships that we are able to continue building a business of such strength. We look forward to sharing the next chapter of growth with you in the months ahead.