alternative investments: hedge funds capability Use the full investment universe to protect and grow wealth

Transcription

1 alternative investments: hedge funds capability Use the full investment universe to protect and grow wealth

2 contents Introduction 03 Innovative investment tools 06 An overview of the market 12 An overview of our capability 14 Risk management 20 How to choose a manager 25 Meet the team 26 Why Sanlam alternative investments hedge fund capability

3 introduction When We nothing believe everyone is sure, deserves everything to is possible. live their Margaret best lives Drabble possible. We aim to improve people s lives by being Wealthsmiths We believe everyone deserves to live their best lives possible. A Wealthsmith is a person who has a deep understanding of the true definition of wealth and knows how to create it and maintain it over the long term. To be a Wealthsmith is to be patient, to act meticulously and to never be hurried. It s having a shrewd mind, and an understanding of what it takes to create wealth and be able to give more of it back. As Wealthsmiths we are committed to building wealth for our clients over the long term This means we are committed to building legacies to embed the right ethical climate, governance systems and practices in our business, and to transform our business to be representative of the communities around us. We take pride in our responsibility towards society We contribute to economic stability by making responsible investment and business decisions to the long-term benefit of all our stakeholders. For our clients to prosper, the society in which we live also has to prosper. We therefore make capital allocation decisions on a responsible basis. This is also referred to as impact or responsible investing, where we actively consider the environment, as well as the social and corporate governance elements of our own investment choices. A Wealthsmith also knows inherently that wealth isn t only measured in rands and cents It s so much more than that. It s peace of mind for investors and those who are entrusted to make investment decisions on behalf of others. hedge fund capability 3

4 our commitment to you When it comes to investing, there s often the temptation to ride the euphoria of speculation. We resist this. We carefully do our homework, weigh up the pros and cons, check, re-check and analyse, scrutinise and remove emotion from each and every investment decision we make. We believe that there s a time to be cautious and a time to be bold. Knowing when to be which is what makes us Wealthsmiths. Whether you are an investor or are entrusted with a duty of care to help an investor make the best possible decisions about their money, we are tirelessly committed to helping you achieve the return and risk objectives that are important to you. 4 hedge fund capability

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6 we give you a broad set of innovative investment tools to protect and grow wealth irrespective of market movements 6 hedge fund capability

7 When volatility increases, asset classes tend to behave in similar ways History has shown that when markets become more volatile, asset classes that were already correlated can become even more so. This fundamentally reduces the diversification benefits of traditional asset classes. Alternative investments can improve diversification and reduce overall volatility One of the main benefits of alternative investments is to provide diversification at an overall portfolio level. The protection and return potential are other attractive characteristics. Studies show that adding uncorrelated assets to a portfolio reduces total portfolio risk and therefore may improve the risk adjusted return of traditional portfolios. We offer a broader set of tools to generate returns and manage risk We give you the ability and flexibility to invest across a wide range of sectors and to respond quickly to changes in the market. We can therefore help you pursue opportunities using tools that may not be available to traditional asset managers. We give you access to a wide range of asset classes that include private equity real estate and private equity infrastructure funds, hedge funds and fund of hedge funds. Most importantly for larger institutional clients and asset consultants, we provide you with distinctive structures and tools; and the expertise to use these to meet your needs. Large university endowment funds embrace the benefits of hedge fund allocations The US University Endowment Funds such as Yale and Harvard have been leaders in diversified multi-asset class investing for over two decades. Notably, their approach to asset class diversification includes a large exposure to alternative asset classes. Through this approach to investing, they have consistently achieved attractive annual returns with moderate risk.* *Frontier Investment management LLP research: Investing Like the Harvard and Yale Endowment Funds, March 2013 hedge fund capability 7

8 Substantial allocations to alternate assets offer a level of diversification unavailable to investors in traditional assets, allowing the creation of portfolios with superior and return characteristics. David F. Swensen, CIO, The Yale Endowment Report, Yale Endowment Fund (2010) Retirement funds Manage the risks of meeting specific and often fixed liabilities Reduces risk through diversification Individual investors Access to some of the best money managers Increased flexibility in the way their money is managed Introduce diversification 8 hedge fund capability

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10 Reduce your dependence on traditional solutions to solve new investment challenges and uncertainty What are the investment attributes of alternative investments? Alternatives offer investors a distinct set of attributes that are not commonly found in mainstream investments products. They typically have a lower correlation to traditional investment products and offer real diversification benefits. Alternative investment managers have more flexibility to maximise returns There are basic similarities between traditional and alternative investments: both invest in a variety of asset classes (for example, shares, securities, bonds and commodities), both have the objective of maximising investor returns and both aim to manage risk. Alternative investments, however, use nontraditional investment strategies such as short selling, derivatives and leverage to maximise investor returns (irrespective of whether the security on which the contract is based is moving up or down in price) hedge fund capability

11 1 Derivatives 2 Short-selling 3 Leverage Derivatives are financial products with value that stems from an underlying asset or set of assets. These can be stocks, debt issues or almost anything. A derivative s value is based on an asset but ownership of a derivative doesn t mean ownership of the asset. When you invest using typical tools, it is all about buying a share that you think will increase in value. Once it has increased in value, you will sell it for a profit. Selling short is selling something that you don t own (but have borrowed) with the anticipation that by the time you need to return it to the lender you would have been able to buy it for a cheaper price. Using debt to benefit from market movements. Risk Enhance Returns Add diversification Increase overall stability when traditional investments underperform Counteract market risk Flexibility and tools to complement traditional investments The ability to generate the returns in falling market environments Flexible asset allocation - get exposure through responsible leverage. Specialist assets and or asset classes: Low volatility High-return macro strategies Specialist strategies linked to specific: - Indices - Assets / stocks - Currencies hedge fund capability 11

12 Globally, the alternative investments market is worth over US$ 600 trillion. This is six times the economic output of the world. The majority (92%) of the world s largest companies use them as investment tools to help them manage uncertainty and improve their potential growth. The scale of the market can have both a positive and negative impact: Positive impact Sophisticated measurement Greater transparency Regulated Operational controls Improve visibility of distortions in the value (expose and benefit from incorrect valuations and pricing) Correct the distortions Activist investors improve efficiency for shareholders Less biased (not owners of the share / underlying asset) Negative impact Could create risk (underlying systemic risk) Leverage causes scale that can create disruptions in the market Can be viewed as speculative An overview of the alternative investments market and the South African context 12 hedge fund capability

13 The South African context in which we operate. Many local hedge funds now have more than 10 years track record and the industry assets under management are over R60 billion. With this growth has come increased product understanding and transparency. Risk monitoring methods and compliance is tightly regulated by the Financial Services Board (FSB). Hedge funds are approved securities in terms of Regulation 28. In addition to this, they are open to retail investors via unit trust (Collective Investment Scheme) fund structures. With broader access to alternative investments, comes a better understanding of the tools we use. Regulatory controls enhance the integrity of the hedge fund industry. Increased regulations mean that there are increasing reporting and disclosure requirements that promote transparency and monitor and manage systematic risk. The legislation separates investor groups into two categories for their protection: Qualified Investor Hedge Fund Qualified investors only Minimum R1 million investment Demonstrate knowledge and experience in financial and business matters to assess merits and risks All investors Retail Investor Hedge Fund Regulatory requirements imposed on funds are more stringent that those imposed on Qualified Investor Hedge Funds. hedge fund capability 13

14 An overview of the Sanlam Alternative Investments Capability We design and blend portfolios using a broad range of alternative investment tools and strategies to cater for your specific requirements. We also offer a range of strategies that aim to capture specific sources of return and protect you against specific risks. Shown in the tables hedge fund capability

15 Sanlam Alternative Rho Fund Sanlam Alternative Xi Fund Credit Opportunities Fund FUND / CAPABILITY AND OBJECTIVE Sanlam Alternative Rho Fund seeks to deliver maximum risk adjusted returns by employing diversified multiple concurrent strategies in primarily South African interest rate markets. It aims to generate active alpha by exploiting market inefficiencies and yield curve dislocations, regardless of market conditions or peer performance. The Fund seeks to achieve its investment objective by positioning in a welldiversified range of different strategies and instruments, expressing views on the term structure of interest rates. Sanlam Alternative Xi Fund seeks to deliver maximum risk adjusted total return (targeting STEFI+2%) The fund invests in money market instruments and exploits arbitrage opportunities in the front end of the money market interest rate curve, enhancing returns with a rated (minimum A-) credit overlay on the portfolio. The Fund endeavours to achieve disproportionate risk-adjusted returns in all market conditions. With the introduction of more stringent regulatory constraints in the banking industry, the risk appetite of banks has been significantly curtailed. This has presented a significant opportunity for non-banking institutions such as ourselves to step in to fill this void. The Fund specifically focusses on identifying opportunities in the off-market credit space. INVESTOR NEED For investors to benefit from changes to interest rates and fixed income exposure. Hedge the risk of income yield fluctuations and reduce the dependency of your portfolio returns on cash returns (driven by interest rates and inflation). Investors who wish to improve the return on short-term cash holdings with very little volatility. For investors who wish to enhance their returns by gaining exposure to credit opportunities in the unlisted space. FUND FACTS Fund inception date: October 2004 Strategy: Fixed income arbitrage Fund manager: Johan Kurtz Prime broker: RMB Prime Administrator: Maitland AUM: R550 million Open to investment: Yes Fund inception date: February 2007 Strategy: Listed credit, A- rated and above Fund manager: Bruce Simpson Administrator: Maitland AUM: R300 million Open to investment: Yes Fund inception date: July 2010 Strategy: Off-market debt Fund manager: Erica Nell, Jared Abels Administrator: Investment Data Services Group (IDS) AUM: R300 million Open to investment: Yes hedge fund capability 15

16 Sanlam Alternative Pi Fund Sanlam Alternative Omega Fund S-ALT Yn Fund + FUND / CAPABILITY AND OBJECTIVE The Sanlam Alternative Pi Fund aims to deliver consistent capital growth irrespective of market conditions. The Fund generates its returns primarily through equity based positions listed on the JSE with auxiliary positions in offshore markets. The Fund strives to generate a high level of growth in excess of the benchmark through carefully selected investments in long equities while generating additional returns through short positioning in overvalued equities that the manager anticipates will decline in value. Our philosophy is to manage the Sanlam Alternative Omega Fund as a unified portfolio across fixed income and equities. Risks are managed for the purposes of achieving targeted return and to reduce portfolio volatility. Risk management will be the main driver of the investment decision making process considering the multiple of risks the Fund takes. Risk attribution for each asset class will be explicitly managed at the strategy levels and at the overall portfolio levels. Seeks to leverage positive returns from the changes that weather, exchange rates, production cycles and interest rates have on soft commodity prices. INVESTOR NEED For investors who would like exposure to equities, but with the added benefit of being able to hedge out potential losses if/when the market moves against you. For investors who would like the equivalent of a balanced fund - with the risk mitigation tools that alternative investments use. This strategy is a combination of the fixed income and equity capabilities. For investors who wish to diversify their portfolio in a very specific way. They may wish to access the benefits of changes in the commodity market through exposure to energy, wheat, soya, maize etc. FUND FACTS Fund inception date: 1 May 2014 Strategy: South African long/short equity Fund manager: Greg Bergh Prime broker: Peregrine Securities Administrator: Maitland AUM: R130 million Open to investment: Yes, but early-stage Fund inception date: 1 July 2014 Strategy: Multi-strategy Fund manager: Sithembele Manyadu and William Ofosu Prime broker: RMB Prime Administrator: Maitland AUM: R150 million Open to investment: Yes Fund inception date: 1 January 2016 Strategy: Soft commodities trading and arbitrage Fund manager: Gert van Wyk Prime broker: RMB Prime Administrator: Maitland AUM: R25 million Open to investment: Yes 16 hedge fund capability

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18 sources of value and return Different alternative investment managers, capabilities and funds use the sources of return shown in the diagram below in different ways and to different extents. What is interesting for investors is that these sources of return show the extent to which we have flexible tools to take advantage of market, industry, sector and company specific changes. Governance structures ensure structural alignment of interests with investors The way a business and its investments are structured can be a fundamental source of value. When they are structured in a way that aligns with investors interests it increases the investment manager s incentive to identify and add value. The most practical example of this is when their primary source of compensation is from performance-based fees rather than management fees based on assets under management. Another example is if the business also co-invests in their own capabilities or funds hedge fund capability

19 Alignment of interests (Between investment managers and clients to increase the incentive to identify and add value) Financial engineering (Finding the best way to take risk and using a range of instruments to benefit from views) A rigorous investment process (For the best utilisation and enhancement of capital) Returns generated by alternative investments Leverage (Heightened exposure to opportunities and finding clever ways to use debt to increase exposure to growth) Timing (Keeping a finger on the pulse of the market and knowing when to buy or sell an asset and who to sell it to) Risk management (Checks and balance to ensure that client interests are protected - identify, monitor and manage investment risk) hedge fund capability 19

20 the risks and how we manage these General risks of alternative investments There are several risks associated with alternative investments above and beyond the typical risks associated with traditional investments. Regular investment monitoring and reporting Higher fees Alternative investments can have high fees. Economic and market overviews. Complexity Alternative investment managers may invest in a wide variety of investments. Understanding complicated investment strategies requires more upfront and ongoing due diligence. Less liquid The underlying investments could be exposed to lower levels of liquidity in stressful trading environments. It can be challenging to measure actual risk exposure Because alternative investments are dynamic and dependent on or linked to other variables it can be hard to measure the extent of the risk to which you are exposed. Hedge funds are often standalone businesses Not being linked to large businesses and brands that have the operational scale to ensure risk control processes are disciplined and robust means that smaller businesses can therefore be exposed to higher operational risks. This is the most common cause of hedge fund failure. How we manage risk We are an independent business but because we operate as part of a conglomerate, the far-reaching brand implications means that our compliance governance, controls, research, risk mitigation processes are critical. The challenge with managing risk in a dynamic environment is that one needs transparent access to information and the operational platform to measure and manage this hedge fund capability

21 We have transparent access to notional exposure metrics. These include snapshots of exposure to: Counterparty credit risk Asset classes Instruments Strategies Daily returns Our models facilitate measurement AND our models enable us to look forward for scenario testing (of expected exposures). Snapshot in time risk Projected risk Stressed environment risk Over and above this risk analysis, we focus on: Liquidity analysis Pricing analysis Valuations We manage risk limits within carefully considered parameters. Ongoing and active management is necessary because the nature of the market and contracts based on underlying assets is dynamic. We actively manage the following: Counterparty features Rating Scale / Size Exposure Type of derivative exposure Asset class exposure Collateral limits / measures / arrangements If need be, we can unwind positions, re-set contracts / exposures, hedge exposure, transfer positions to others to ensure that we maintain appropriate parameter-driven exposure amounts. We are an independent business but we operate as part of a conglomerate. hedge fund capability 21

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23 how to take advantage of alternative investments Take a conservative approach By definition, alternative investments use a non-traditional approach to investing. Therefore, it is prudent to take a conservative approach, opting for those strategies with a proven track record and stable investment team and process. With new offerings being offered regularly in this fast-growing space, it is wise to exercise caution. Consider businesses that have a solid brand, proven operational and compliance controls, and of course, a track record of demonstrated success. By definition, alternative investments use a non-traditional approach to investing, therefore it is prudent to take a conservative approach. What to consider when choosing a hedge fund Look at your current portfolio weightings and consider Assessing your concentration risk and overall correlation metrics (many investors focus on manager diversification only to find that the managers hold the same underlying shares) Analysis and metrics of the strategy that will improve returns and reduce your specific risk (long vs short) Investment views Current performance drivers Extent of the leverage Portfolio construction is important - Rebalancing / annual review - Analysis measurement operational platform hedge fund capability 23

24 1. Define your objectives ü 2. Identify the right strategy a. Reduce risk b. Efficient portfolio management 3. Map out benefits and costs 4. Understand the risk a. Measure b. Manage c. Control 5. Ensure the manager has a robust operational procedure a. Appropriate governance and risk reporting b. Pricing, executing, booking transactions c. Measuring and reporting risks and their impact on asset exposure, liability exposure, liquidity profile and cash flows d. Operational aspects of derivatives (collateral transfers) e. Contractual discipline f. Monitor, measure, manage counterparty risk limits and breaches g. Regulatory compliance 6. Identify and disclose risk limits 24 hedge fund capability

25 how to choose an alternative investments manager a. Skills and proven track record of strategies and managers? b. Operational platform is critical: i. Systems ii. Checks and controls iii. Qualitative and quantitative metrics iv. Risk management and governance framework v. Understanding of and compliance with regulatory framework vi. Alignment with investor interests from a fees point of view vii. Incentive to generate absolute returns viii. Transparency and reporting a. Credibility b. Independence c. Trust d. Scale / liquidity e. Access to resources and research f. Autonomy g. Brand a. There are a wide range of strategies b. Different language and terminology c. Broad and more specific categories i. Some analyse stocks to look for mispricing ii. Some study macro trends iii. Some fund of hedge funds do research and analysis for you and combine the strategies for you iv. Long-short strategies (directional and pairing) v. Event driven What will complement your existing portfolio? Is there a specific strategy that you feel will improve your asset allocation? hedge fund capability 25

26 meet the team The current skills base has an impressive multi-year and multistrategy skill base across research, analysis and proprietary trading environments. This is backed by extensive experience and industry connections. We are incentivised by our results and invest our money alongside clients We continue to invest in people development, with nine senior managers in the business with over 133 years of combined experience. We offer equity, fixed income, money market, foreign exchange, soft commodities and derivative experience. We do our own research, trading, price-making, money management and risk management. With the benefit of having worked within banks, asset managers, commodity trading houses and other hedge funds we offer a well-rounded capability in the alternative investments industry. In addition to this, five junior team members are currently undergoing an intensive training program, so that we continue to build depth in the team and reduce key person dependency (which remains a risk in many boutique businesses). Social responsibility and transformation As part of its transformation initiative, Sanlam has launched a three-year graduate training programme at the start of 2015, with room on the desk for up to five skilled individuals. It targets black masters level graduates. For the first 18 months, the trainees study, conduct research and paper trade and then they are allocated a small amount of seed capital to invest in markets. Each graduate has a senior member of the team as a mentor. The intention is for the trainees to develop a track record of their own and get a real taste of what it is like to manage money. They have the opportunity to do another 18 months of trading, after which there is the potential to integrate them into the business hedge fund capability

27 Bruce Simpson CEO BA (Economics) William Ofosu Hedge Fund Manager: Multi-Stategy BCom Sithembele Manyadu Hedge Fund Manager: Multi-Stategy Masters in Management (Finance and Investments) Greg Bergh Hedge Fund Manager: Long Short Equity MBusSc (Finance), CFA Bulent Badsha Hedge Fund Manager: Macro Opportunities BCom Johan Kurtz Hedge Fund Manager: Fixed Income BCom (Hons) Erica Nell Hedge Fund Manager: Credit MCom, CA(SA) Gert van Wyk Hedge Fund Manager: Soft Commodities MCom (Risk Management) Jared Abels Hedge Fund Manager: Credit BCom (Hons) hedge fund capability 27

28 what sets us apart 28 hedge fund capability

29 Sanlam Alternative Investments represents the Sanlam Group s commitment to providing investors with solutions that can help them grow and protect their wealth irrespective of market conditions. Entrepreneurial flair within the discipline and scale of a large group Sanlam Alternative Investments is an independent and entrepreneurial business unit that sits within Sanlam Investments. As an institution, Sanlam has long been a supporter of alternative strategies. The strategic alignment of a number of alternative investment strategies and capabilities within one business represents a firm commitment to consolidating, growing and developing the intellectual base, range of strategies and access to alternatives for investors within the Sanlam Group and via external distribution networks. Operational excellence, better risk controls and governance Being part of one of the largest conglomerate financial services providers in Africa has great benefits for the business. They leverage off the group for legal, compliance, HR, operations, IT and also have access to scrip lending agreements and fundamental and qualitative research. The compliance team monitors portfolios daily. Access to ideas, research and relationships We have access to third-party research, flow information and trade idea generation because we are part of a large group of businesses. Trades are executed independently, with managers receiving fair pricing and liquidity from the market due to them being part of a greater group. A long-term view and a focus on performance Access to seed capital and financial backing from the Group, if and ever necessary to invest in intellectual capital; and build sustainable business cases for different strategies; is an important differentiator. This is because managers are able to take the time to make the right decisions and concentrate on performance, rather than be in a rush to raise assets or buy and sell instruments for liquidity. An active approach to the benefits of transformation Sanlam s strategic plan for the business includes a significant transformation component, with a goal to reflect South Africa s multiracial make-up. They believe that there is a significant advantage to partner with, develop, and mentor the right talent. Alternative investments sit alongside traditional active and passive strategies From an investor point of view, we believe that every active and passive portfolio should make use of the extended set of tools that we have available to ensure that returns are not dependent on markets only going up. But in spite of this, we treasure our independence and ability to be entrepreneurial. Managers have the freedom to express their own views and run their own strategies, but with a high level of risk and operational oversight. hedge fund capability 29

30 Sanlam Alternative Investments represents the Sanlam Group s commitment to providing investors with solutions that can help them grow and protect their wealth irrespective of market conditions. The Sanlam Investments business incorporates the Sanlam Group s investmentrelated businesses, ensuring that all business practices and performances are aligned. The business is diversified across a broad range of specialist investment businesses. Its areas of expertise include conventional asset management, alternative investment solutions, collective investment schemes, employee benefits, property asset management, private client investment management and stock broking, multimanagement, structured products (including guaranteed products) and private equity funds. Sanlam Investments has, over a period of time, incorporated a number of businesses that function across the financial services value chain. The result is a diverse range of businesses which has enabled us to develop a range of products and solutions aimed at meeting the needs of our increasingly diverse client base. With more than R440 billion in assets under management, the Sanlam Investments active management unit is one of the largest in South Africa. SI offers client-focused solutions based on a comprehensive range of investment portfolios, namely unit trusts, life pooled portfolios and segregated portfolios for third-party institutional and retail clients, as well as the Sanlam Group. SI manages portfolios for retirement funds, long-term insurers, short-term insurers, medical schemes, municipalities, university endowment funds, charities, mining rehabilitation funds, trusts and offshore clients. Portfolios are managed by multispecialist investment teams who share a common research platform and offer the following capabilities: equities, fixed interest, balanced funds, absolute return funds and liability-driven funds. These teams interact, share ideas and engage in robust debate, ensuring that the investment ideas generated are a result of the interaction of a variety of investment professionals with rich and diverse skills and backgrounds. A key contributor to their performance is having access to a formidable and comprehensive research base and systems, with teams devoted to asset allocation, macro-economic and equity research. SI believes investment performance is the outcome of many factors and that the team has successfully combined all of these to deliver strong performance across the entire investment range hedge fund capability

31 Sanlam Investments a shared platform that enables us to meet client-specific needs hedge fund capability 31

32 why Sanlam alternative investments? Passive Alternative investments Active 32 hedge fund capability

33 We are committed to improving lives We recognise that the money we manage represents hard work, endeavours, and aspirations. If you represent retirement fund members or a non-profit organisation, we appreciate that the money needs to be there in the long run to enable members to retire with dignity and for organisations to fulfil important missions. We understand what s at stake. That s why we work to deliver real, lasting value. And that s why we re committed to our purpose: improving the lives of our clients. We are backed by a leading industry brand that gives clients peace of mind It also gives us support in the form of a strong, disciplined and scalable business platform. Our senior management team have proven expertise and a great track record. And we have an active talent development programme to diversify our team and give opportunities to the next generation. Being part of a diversified business gives us the benefits of scale, but as relatively small team we are independent, entrepreneurial and incentivised to develop innovative solutions for clients investment needs. We make money out of risk and we only make money when we make money for you We have developed a compelling alternative investment capability to operate in a complementary way to traditional investments. This is because we believe that for true diversification, alternative investments should form a part of every investment portfolio. It is like dynamic insurance for your investment portfolio. We offer a broad range of capabilities for institutions and individuals Our objective is to bring together the best alternative investments in multi-manager portfolios and leverage our investment research capabilities to provide innovative solutions to client needs. We provide alternative investment solutions to a range of clients and our capabilities in the hedge fund space are broad. An alternative approach to active management We have the tools, expertise, skills, track record and incentive to take advantage of opportunities and mitigate against the risks inherent in traditional long-only active and passive strategies. hedge fund capability 33

34 leading broad-based financial services group Group Office Sanlam Emerging Markets Emerging markets ex-sa: life insurance, general insurance, investments, credit & banking Sanlam Personal Finance SA Retail: life insurance, investment & other financial services Sanlam Group Sanlam Investments SA & Developed markets: investment management, wealth management, credit & structuring Sanlam Corporate SA & EM corporate: employee benefits, health Santam General insurance in SA & co-investor in SEM general insurance businesses 34 hedge fund capability

35 United Kingdom Ireland Switzerland USA Equities Manager of the Year 2016 Equities Manager of the year India The Gambia Philippines Ghana Uganda Kenya Rwanda Burundi Nigeria Malaysia Tanzania Malawi Zambia R787 bn Mozambique Zimbabwe Namibia Botswana Swaziland Lesotho South Africa Australia Sanlam is a leading broad-based financial services group in South Africa Sanlam is a leading broadbased financial services group in South Africa. In nine decades Sanlam has set benchmarks for wealth creation, innovation and empowerment in South Africa. Sanlam has offices throughout South Africa as well as business interests elsewhere in Africa, Europe, India, Malaysia, Australia and the USA. The Group s international footprint is illustrated above. Sanlam provides financial solutions to individual and institutional clients. These solutions include individual, group and short-term insurance, personal financial services such as estate planning, trusts, home and personal loans, savings and linked products, investment, asset management, property asset management, stockbroking, risk management and capital market activities. Sanlam provides these solutions to various segments of the markets where it operates and offers the solutions from a number of mutually dependent business entities in the Group. From a life insurance company established in 1918, Sanlam has grown into a diversified one-stop financial services group, offering its clients a journey for life for their financial needs. hedge fund capability 35

36 The Sanlam Group is a full member of the Association for Savings and Investment SA. Sanlam Investments consists of the following authorised Financial Services Providers: Sanlam Investment Management (Pty) Ltd ( SIM ), Sanlam Multi Manager International (Pty) Ltd ( SMMI ), Satrix Managers (RF) (Pty) Ltd, Graviton Wealth Management (Pty) Ltd ( GWM ), Graviton Financial Partners (Pty) Ltd ( GFP ), Radius Administrative Services (Pty) Ltd ( Radius ), Blue Ink Investments (Pty) Ltd ( Blue Ink ), Sanlam Capital Markets (Pty) Ltd ( SCM ), Sanlam Private Wealth (Pty) Ltd ( SPW ), Sanlam Credit Fund Advisor Proprietary Limited, Sanlam Africa Real Estate Advisor Proprietary Limited and Sanlam Employee Benefits ( SEB ), a division of Sanlam Life Insurance Limited; and has the following approved Management Companies under the Collective Investment Schemes Control Act: Sanlam Collective Investments (RF) (Pty) Ltd ( SCI ) and Satrix Managers (RF) (Pty) Ltd ( Satrix ). Collective investment schemes are generally medium- to long-term investments. Please note that past performances are not necessarily an accurate determination of future performances, and that the value of investments may go down as well as up. A schedule of fees and charges and maximum commissions is available from the Manager. Additional information can be obtained from the Manager, free of charge. Collective investments are traded at ruling prices and can engage in borrowing and scrip lending. Collective investments are calculated on a net asset value basis, which is the total market value of all assets in the portfolio including any income accruals and less any deductible expenses such as audit fees, brokerage and service fees. Actual investment performance of the portfolio and the investor will differ depending on the initial fees applicable, the actual investment date, and the date of reinvestment of income as well as dividend withholding tax. Forward pricing is used. The Manager does not provide any guarantee either with respect to the capital or the return of a portfolio. The performance of the portfolio depends on the underlying assets and variable market factors. Performance is based on NAV to NAV calculations with income reinvestments done on the ex-div date. Lump sum investment performances are quoted. The portfolio may invest in other unit trust portfolios which levy their own fees, and may result is a higher fee structure for our portfolio. All the portfolio options presented are approved collective investment schemes in terms of Collective Investment Schemes Control Act, No 45 of 2002 ( CISCA ). The fund may from time to time invest in foreign instruments which could be accompanied by additional risks as well as potential limitations on the availability of market information. The Manager has the right to close any portfolios to new investors to manage them more efficiently in accordance with their mandates. The portfolio management of all the portfolios is outsourced to financial services providers authorized in terms of the Financial Advisory and Intermediary Services Act, 2002 (FAIS). This publication is intended for information purposes only and does not constitute financial advice as contemplated in terms of the FAIS Act. International investments or investments in foreign securities could be accompanied by additional risks, such as potential constraints on liquidity and the repatriation of funds, macroeconomic risk, political risk, foreign exchange risk, tax risk and settlement risk, as well as potential limitations on the availability of market information. Use or rely on this information at your own risk. Independent professional financial advice should always be sought before making an investment decision. 55 Willie van Schoor Avenue, Bellville 7530 Private Bag X8, Tyger Valley 7536, South Africa T: +27 (0) F: +27 (0) institutional@sanlaminvestments.com 36 hedge fund capability