Why did hedge funds lose their shine in South Africa?
Hedge fundis a term that has long been used to imply a safe investment anchorage in profitable markets.
How does hedge fund work?
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The outcomes would eventually leave all off-guard managers restless.
Official statistics indicated that by mid-2017, they had dropped by 10 percent in asset value.
Declines in subsequent years could even be severe even as the market continues to suffer similar uncertainties.
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This follows continued heckling among stakeholders who have directly suffered from its low performance.
Hedge funds are allegedly pocketing excessive fees with a partial focus on performance as promised to investors.
Their managers have long faced accusations for failing to deliver but instead eyeing lucrative fees.
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The recent stock shocks remain a cause of concern even as the funds continue to face unfavourable publicity.
Various surveys have exposed new rules as a hindrance on significant asset value rise.
South African hedge fund market has also suffered wrong marketing, which has limited significant progress.
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Investors are, therefore, unwilling to take chances in the SA market, leaving it to remain unstable.
South African hedge funds are mostly run by competent managers who are not necessarily experienced in tracking daily expenses.
Besides, poor management is compensation challenges which result from excessive or inadequate compensation schemes among workers.
Perception-based marketing approaches are the leading cause of declining partnerships which continue to frustrate the market.
It is now proving difficult and costly to correct or at least improve deteriorated market perceptions.
Declined partnerships have opened room for inexperienced market players who are further upsetting genuine investors with huge losses.
Is there a future for hedge fund companies in South Africa?
Only time will tell if hedge funds in South Africa will regain their shine.
She has a BSc.
She loves traveling and checking out new restaurants.
Her email address is jedidahtabalia@gmail.com
