Authored by Hedge News Africa
X-Chequer Fund Management has recently celebrated its eight-year anniversary as a business, growing consistently since founder and CEO Werner Prinsloo started out with a single hedge fund offering in 2006.
The company now employs nine fund managers managing its five hedge funds out of offices in Cape Town and Johannesburg.
Its two longest standing funds, the flagship X-Chequer Market Neutral fund and the X-Chequer Long/Short Fund, have recently achieved eight- and six-year milestones respectively. In addition, the company is opening its newest strategy, a CTA fund, to outside investors.
The company’s core investment philosophy is a prudent long-term absolute-return approach to investing, which is evident in the returns of these funds.
The X-Chequer Market Neutral fund, led by Prinsloo, has been a consistently strong performer delivering an annualised compound 14.6% since inception in June 2006. During that time the fund has only had 10 negative months, three of which were less than -0.3%, with a maximum drawdown of 1.5% over the period. The fund has returned a net 9.91% in the first five months of 2014.
The X-Chequer Long Short fund has returned an annualised compound 17.62% since its inception in June 2008. It has delivered a net 5.52% so far this year to the end of May. Fund manager Walker Naude applies a prudent approach to the management of this fund, incorporating a substantial amount of market-neutral pair trading as one of the key building blocks. This ensures a strong focus on absolute returns with only eight negative months in its six-year trading history and a maximum cumulative drawdown of 3.3%. Despite being long/short in nature, X-Chequer believes the fund is one of the lowest risk funds in its peer group.
X-Chequer’s fund managers have received several awards over their trading history in recognition of their achievements. Other long-term single-manager funds in the stable include the X-Chequer Equity Hedge Fund, a diversified quantitative variable bias strategy, and the X-Chequer Freestone fund, a fixed income offering. These funds are coming up to their seven- and five-year milestones respectively.
The most recent addition to the stable, the X-Chequer CTA fund, was launched in response to a specific investor request.
The CTA fund is a trend-following fund trading South African equities and futures. The fund has been trading for 22 months and delivered a total return of 152% over the period for an annual compound return of 65.5%.