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Heads I win, Tails you lose
For most investors, hedge funds have historically been opaque products where ‘magic’ happens. The domain of the wealthy, with limited access, high hurdles for entry and outsized returns.
In South Africa, the industry has struggled to gain traction, although for a niche of investors, around R100bn worth[1], they have found a compelling proposition in which to invest. Hedge funds offer the ultimate outcome: upside growth with limited downside, and this appeals to investors widely, particularly those who have made their wealth and where loss aversion is a key factor in their decision making
process.
In this month’s comment, we explore the hedge fund proposition in more detail and how investors can consider them as options within their financial plan.
