Peregrine Capital’s High Growth Fund made history in December 2020 when it became the first fund in South African to achieve 10 000% return for investors since its inception. This means that R1m invested on 1 February 2000 would be worth more than R100m today.

Peregrine Capital was founded in 1998 and is the longest running hedge fund manager in South Africa. Since inception, Peregrine Capital’s mission has been to create and protect the wealth for its clients by delivering superior risk-adjusted long-term returns through the rigorous application of their time-tested investment process.

The goal of the High Growth Fund has always been to deliver exceptional returns to investors, and as such, it is the fund with the most equity market exposure in our hedge fund stable. The net equity exposure in the fund is typically between 60% and 80% and is therefore very comparable to funds in the multi-asset high equity category. Over the past 21 years, the average fund in the ASISA South Africa multi-asset high equity category has given investors an annualised return of around 10.3%. The High Growth Fund has delivered more than double that at 24.9% per annum.

Source: Peregrine Capital

This sort of long-term record is not something that can be achieved by simply swinging for the fences and assuming excessive risk. In fact, it can only be achieved if risk management is a cornerstone of your process. Loading up on risky bets might give a fund an exceptional once off return, but ultimately it will sink the ship at some point on the journey. “Our process always values consistency and predictability of outcomes over great short-term returns.  In the 21-year life of this fund, we  have not had a drawdown of even half the biggest drawdown on the JSE. The Fund’s maximum drawdown has been 17% vs. 40% for the JSE Capped SWIX. That for us is a key measure to look at because lower drawdowns and volatility make for much happier investors,” said Jacques Conradie, CEO and Portfolio Manager at Peregrine Capital. Achieving great returns on its own is not enough, it needs to be accompanied by exceptional risk management. “By managing our portfolio risk well in March last year (the High Growth fund was down 1% vs. 16% for the JSE), it made it much easier for us to post a good net annual return of 17% when the JSE managed less than 1% in 2020,” added Jacques.

While 100x capital is a proud achievement, it is more a by-product of Peregrine Capital’s investment process, than a goal set out to be achieved by the business. It demonstrates the impact of the compounding of returns over an extended period of time. It highlights the importance of investing for the long-term and sticking with a manager that can deliver sustained returns through the consistent application of a tried and tested investment process. “We are committed to applying those principles with renewed vigour for the next 20 years, so that we continue to deliver exceptional future returns for our clients,” commented Jacques.