BNC#5: Cy Jacobs – Do higher by defending capital on the ten worst days, than lacking the ten greatest days

On this BNC#5 presentation, Cy Jacobs focuses on hedge fund funding methods, highlighting forensic analysis into companies which are believed to be unsustainable. Jacobs discusses the flexibility to evaluate the present atmosphere and select between worth, progress, or high quality investments. Highlighting the significance of defending capital throughout down markets and the advantages of shorting property. Jacobs additionally delves into present market challenges, akin to geopolitical tensions, COVID, zero carbon emissions, and political points, however highlights the alternatives that exist, significantly in renewable power investments. Jacobs concludes with a dialogue on the significance of discovering alternatives inside a disaster.

Some extracts from the presentation:

Cy Jacobs on the 36One Asset Administration background

Only a fast background on 36One – myself and the core of the crew managing cash for some 25 years, we imagine we’ve received a reasonably good monitor report. We’ve a various product providing, in all probability the biggest hedge fund supervisor within the nation, however we additionally handle SA fairness, basic fairness, and balanced funds. We handle the PPS balanced fund, we’ve a versatile fund, lengthy solely, world fund, and so on. So we’re actually throughout the entire spectrum of mandates. As Magnus stated, I’m not right here to promote you something. It’s actually your alternative as traders, when you’d like to take a position with us and which fund you favor. And clearly completely different funds carry out in another way at completely different levels. However I do imagine our crew is outstanding. We’ve constructed it over 18 years and it’s by no means been stronger and we’ve by no means finished higher relative to our competitors on the market. 

Learn extra: BNC#5: Magnus Heystek on the report – Western Cape; greatest offshore geographies; Greylisting; and far more

On assessing the present atmosphere and on the lookout for higher

One other factor Piet’s been talking about is worth versus progress, and possibly the market has shifted now into worth. At 36One, we don’t wish to be boxed into worth or progress, or high quality. We wish to assess the present atmosphere and see what’s higher. And clearly, with charges within the US spiking and, truly, charges are actually taking a look at in all probability 5 and a half % within the US. The cycle has switched to worth and once more at 36One, which means we might be quick a number of the long-duration names and the expansion names that aren’t high quality and lengthy a few of these value-based alternatives 

Learn extra: South Africa might lose privileged entry to US markets – International Coverage Analyst Peter Fabricius

On hedge funds being higher

So again to the hedge fund. It’s crucial to know markets don’t at all times go up – in addition they go down. So within the worst ten months that the markets have ever had since our existence, which fits again to 2008, 2020, for instance. You may see how the fund has finished in purple vs the market in grey. In actual fact, March of 2020 was in all probability the worst month, when COVID struck. And you’ll see the hedge fund misplaced no cash… simply bear in mind, it’s usually about down markets. Wanting on the hedge fund, the truth is over the lifetime of the hedge fund, you may see it’s very conservative in up months – 123 up months, which is greater than ten years of optimistic returns available in the market. What’s crucial is that there have additionally been virtually 80 down months – seven years of damaging markets the place the markets misplaced 3% and our hedge fund has truly misplaced nothing. You place the 2 collectively, clearly, it’s quite a bit higher than the market. And with a fraction of the chance. 

Learn extra: Funding debate with Piet Viljoen and Cy Jacobs

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