About Us
Caveo Fund Solutions (Proprietary) Limited (Registration number 2003/017504/07) was formed in November 2005, as a joint venture investment management company between Alexander Forbes Investments Holdings Limited and Peregrine Financial Services Holdings Limited, two of the leading South African names in investment multi-management and hedge fund management, respectively.
Since, August 2016, it is wholly owned by Alexander Forbes Investments Holdings Limited.
We focus solely on the construction, monitoring and maintenance of fund of funds alternative asset class portfolios. We believe alternative asset classes and strategies deliver different risk-and-return streams from traditional asset classes. Therefore their inclusion in a portfolio of traditional assets may improve the portfolio's risk-adjusted returns, over time.
The regulatory environment regarding hedge funds within South Africa has recently changed. Hedge fund managers continue to be licensed as authorised financial services providers, in terms of the Financial Advisory and Intermediary Services Act. Caveo is an authorised financial services provider (FSP24297), and also an authorised hedge fund manager. Hedge funds were previously unregulated. However, they are now regulated in terms of the Collective Investment Schemes Control Act as collective investment schemes in hedge funds. Caveo is the hedge fund manager of the hedge funds within the Alexander Forbes Investments QI Hedge Fund Scheme and the Alexander Forbes Investments RI Hedge Fund Scheme. Alexander Forbes Investments Unit Trusts Limited (Registration number 2001/015776/06) is registered and approved as a Manager, under the Collective Investment Schemes Control Act and is approved as the Manager for both the schemes.
Contact details of the Hedge Fund Manager:
Caveo Fund Solutions (Proprietary) Limited
Postal Address: PO Box 786055, Sandton 2146
Physical Address: 115 West Street, Sandown, 2196
Telephone number: +27 (0) 11 505 6200
Contact details of the Manager:
Alexander Forbes Investments Unit Trusts Limited
Postal Address: PO Box 786055, Sandton 2146
Physical Address: 115 West Street, Sandown, 2196
Telephone number: +27 (0) 11 505 6000
INVESTMENT PHILOSOPHY
- Alternative asset classes and strategies deliver different risk-and-return streams to traditional asset classes
- Including alternative asset classes and asset class strategies within a portfolio of traditional assets will improve the portfolio's risk-adjusted return over time
- Diversification across manager styles is essential for a fund of fund to achieve required investment returns in various market conditions
- Fund of fund alternative asset management is primarily about controlling risk while attaining targeted returns
- Diversification by manager style is essential to achieve the investment objectives in various market conditions
- Ensuring disclosure of information from underlying managers is a prerequisite to conducting effective ongoing risk management
- Dedicated specialists are required to construct and monitor fund of fund alternative investment portfolios as a result of the unique complexities and risks of such investment strategies
Investment Process

Screening
Caveo maintains a database of all funds in the investment universe. This is the primary resource for screening the universe and uses both qualitative and quantitative techniques to both compare existing managers with their peers and importantly highlight potential investment opportunities. From a qualitative perspective, a proprietary system internally referred to as MARS (Manager Assessment and Ranking System) is the key tool used to assess funds in a particular investment universe. This system provides a structure within which all managers in the universe can be evaluated and compared, irrespective of strategy, style or performance. Managers are analysed using a wide range of qualitative factors which are scored and then the aggregate scoring is used to rank the mangers. This is done at a universe level and by strategy allowing a robust comparison of different products and providers. Evaluating managers from a quantitative perspective is less subjective as realised returns are the basis for all calculations.
Due Diligence
Once a fund has been screened and identified as a potential investment opportunity, Caveo relies heavily on the thoroughness of its due-diligence process and the depth of knowledge it acquires and maintains about the funds it selects. The due diligence not only focuses on investment factors (such as the investment managers' abilities, the robustness of the investment process, the fund's philosophy, risk controls, and investment systems) but also on important operational factors (such as the investment manager's sustainability, the legal structure, references, disclosure levels and its administration capabilities).
MANAGER SELECTION AND PORTFOLIO CONSTRUCTION
If a fund has successfully passed through the due-diligence process, its appropriate weighting within the fund of fund investment portfolio is based on a qualitative and quantitative evaluation. Qualitative factors play a significant role in determining the weighting, as opposed to solely relying on an optimisation process resting on essentially quantitative analysis of historical correlations and sensitivities to market factors. It is critical to blend diverse funds when constructing a robust fund of fund investment portfolio. This ensures fund managers' styles of investing complement rather than replicate each other. Guidelines and bands are in place to aid the maximum allocation to any manager or style. The result is a well-diversified and risk-controlled mix of leading managers aimed at providing better risk control than when investing with one manager, irrespective of market cycles/conditions.
ON-GOING MONITORING
Caveo insists on receiving a high level of disclosure from its underlying fund managers to ensure a fund stays within the stated investment guidelines. The company monitors its portfolios and the underlying fund managers at various levels to control exposures, positions and risks. The regular monitoring of the fund managers enables Caveo to identify events requiring action, thus maintaining or enhancing each portfolio's ability to deliver targeted return objectives.
INVESTMENT AND RISK COMMITTEE
The Caveo Investment and Risk Committee retains oversight of all key investment decisions and on-going monitoring of portfolios and their mandates. The Investment and Risk Committee's representatives are drawn from the Caveo executive and key personnel from the shareholders
INVESTMENT AND RISK COMMITTEE
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Gyongyi King |
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Lebo Thubisi |