The three elements that drive exceptional investment performance

Jacques Conradie, CEO and Portfolio Manager at Peregrine Capital, South Africa’s longest-running hedge fund manager, recently spoke about what he believes it takes to achieve 100x your money from your investments. Peregrine Capital High Growth H4 QI Hedge Fund (High Growth Fund) is the first fund in South Africa to achieve 100X an investor’s initial investment, so a million rand invested in the fund in February 2000 is worth more than R100m now.

 “You have to do many things consistently right to generate sustainable, strong investment returns.”

The ingredients required to produce very strong industry-leading returns can be broadly grouped into three major categories throughout Peregrine Capital’s twenty-three years.

Firstly, attracting the right clients as partners with a long-term mindset is a vital ingredient that allows investment managers to make rational, long-term investment decisions. “We want to partner for the long haul. Our philosophy only succeeds if our partners give us the space to invest in attractively valued companies that we think will outperform over multiple-year periods. The patience of our investors is a competitive edge for our funds, and we truly value and appreciate the faith that our investors continue to show in our process and our team,” said Conradie.

Secondly, people are vital in this business as they implement decisions and make investment calls. “Our highly skilled investment team has consistently applied our unwavering investment process since our inception, which has generated strong risk-adjusted returns for our clients throughout Peregrine Capital’s history. In addition to this are our values which focus on a ‘day one’ mentality where speed, innovation, client service, and meritocracy are encouraged, embraced, and lived daily,” Commented Conradie.

And then finally, Conradie stressed the importance of the investment philosophy and the rigorous implementation of that philosophy, which has not changed since the business started in 1998. Peregrine Capital is and will remain a fundamental bottom-up, valuation-focused investor.

“We only invest in our very best investment ideas. We are not index huggers; we will not own a share simply because it is a specific size in the benchmark. Our team has conducted work on every company in our portfolio and the sum of these bottom-up ideas is what we think is the best risk-reward for clients at that point in time. We make sure that we only invest in businesses that we understand extremely well. We do a lot of work on the company’s financials; we spend a tremendous amount of time with management; we speak to their clients and suppliers to make sure we understand the company’s strategy, market position and competitive advantages. Only then do we build our models, debate them vigorously as a team, and conclude on a course of action,” said Conradie.

In closing, Conradie was asked what has been the outcome of this investment process, the people, and having the right client base? He responded with, “In short, the High Growth Fund is where we try to achieve maximum risk-adjusted returns for investors over the long run. It is very pleasing to see what this fund has done over time. We are up about 115x since inception now, so we have not stopped pushing after we got across the 100x return mark, and hopefully, in a few years from here, we can chat about 200x returns for our investors.”

About Peregrine Capital

Peregrine Capital’s High Growth Fund

Jacques Conradie on the Peregrine Capital High Growth QI H4 hedge Fund, which has delivered 100x initial investment since its inception in February 2000.

Peregrine Capital – 100x your money

Jacques Conradie, CEO and Portfolio Manager at Peregrine Capital, highlights what has contributed to the superior performance of Peregrine Capital’s funds over the last two decades which includes a solid investment process and the role people play to deliver performance as an outcome.

Fund factsheets

Peregrine Capital High Growth H4 QI Hedge Fund

Peregrine Capital Pure Hedge H4 QI Hedge Fund

Partners Handbook

An introduction to Peregrine Capital’s investment process, the culture established and the core competencies Peregrine Capital believes are necessary to optimise long-term investment returns.