Retail Investor Hedge Fund
RECM SA Special Situations Prescient RI
Currently the only dedicated JSE special situations vehicle, giving its investors targeted exposure to a historically underexploited area of the market.
The problem it solves
Most South African funds allocate only a small portion of capital to special situations. The fund is currently the only dedicated JSE special situations vehicle, giving its investors targeted exposure to a historically underexploited area of the market.
Special situations have tended to outperform the broader JSE thanks to the inefficiencies and complexity event-driven opportunities create. Returns are typically less correlated with general market conditions, with many situations having a strong cash underpin, which helps to reduce downside risk.
By offering portable exposure to this niche, the fund provides a differentiated source of risk-adjusted returns.
Our strategy
The fund invests predominantly in JSE-listed, event-driven opportunities, primarily equities, across five categories.
Spin-offs
Buyouts
Liquidations
Activism
Restructurings
Where appropriate, we hedge merger, unbundling and industry exposures using short selling to manage risk.
Investment process
Continuous screening of the full JSE for corporate event catalysts.
Deep fundamental due diligence on identified opportunities.
Position sizing based on disciplined value-at-risk models.
This process ensures selectivity and robust risk management.
At a glance
More information
The fund is managed by Richard Cheesman, as a representative of Regarding Capital Management (Pty) Ltd. Richard is the founder of Urquhart Partners, a special situations investment company. To learn more, visit urquhartpartners.com.
Statutory information
Investment objectives
The RECM SA Special Situations Prescient Retail Hedge Fund aims to deliver returns exceeding the average of South African cash and equities over the long-term. The fund is a dedicated JSE special situations fund. The fund will predominantly invest in JSE equity securities, targeting exposure to a traditionally underexploited segment of the market. Special situations, referring to investments in securities that relate mostly to imminent expected events or actions that could lead to the increase in the value of the security or so-called ‘unlock of value’, have historically outperformed the broader JSE due to market inefficiencies and complexities they present. The fund may also hold related fixed-income instruments, over-the-counter equities, unlisted shares, commodities and derivatives. The leverage will not be more than 2:1 (being adjusted gross exposure to net asset value). The manager shall use the commitment method to calculate the Fund’s total exposure.
Disclaimer
Collective Investment Schemes in Securities (CIS) should be considered as medium- to long-term investments. The Manager does not provide any guarantee either with respect to the capital or the return of the Fund. The value of participatory interests (units) may go up as well as down and past performance is not necessarily a guide to future performance. CIS are traded at ruling prices and can engage in borrowing and scrip lending. The Manager may borrow up to 10% of the market value of the portfolio where insufficient liquidity exists. Forward pricing is used. Fluctuations or movements in exchange rates may cause the value of any underlying international investments to go up and down. CIS prices are calculated on a net asset basis, which is the total value of all the assets in the portfolio including any income accruals and less any permissible deductions (Brokerage, STT, VAT, Auditor’s fees, Bank Charges, Trustee and Custodian fees and the Service Charge) from the portfolio divided by the number of participatory interests (units) in issue. A schedule of fees, charges and maximum commissions is available on request from the management company. Commission and incentives may be paid and if so, would be included in the overall costs. These portfolios may be closed. Different classes of units may apply in a portfolio and are subject to different fees and charges.
The Manager retains full legal responsibility for any third-party-named portfolio. Where foreign securities are included in a portfolio there may be potential constraints on liquidity and the repatriation of funds, macroeconomic risks, political risks, foreign exchange risks, tax risks, settlement risks; and potential limitations on the availability of market information. The investor acknowledges the inherent risk associated with the selected investments and that there are no guarantees.
This document is for information purposes only and does not constitute or form part of any offer to issue or sell or any solicitation of any offer to subscribe for or purchase any particular investments. Opinions expressed in this document may be changed without notice at any time after publication. We therefore disclaim any liability for any loss, liability, damage (whether direct or consequential) or expense of any nature whatsoever which may be suffered as a result of or which may be attributable directly or indirectly to the use of or reliance upon the information.