Yonela Makwetu will lead an investment team seeking growth opportunities.
AIP Capital Management has recruited Yonela Makwetu to be its new chief investment officer. Makwetu (pictured) joins the firm from Sanlam Investments, where she served as a portfolio manager and co-head of alternative investments.
Makwetu was also previously an investment analyst and junior portfolio manager at Novare.
AIP executive director Eugene Visagie said that Makwetu’s appointment comes as the firm is looking to expand its offering.
‘We are relaunching the business as an alternative asset manager focusing on hedge funds and private equity, with some offshore capabilities. We are in the process of launching a second retail hedge fund and a global portfolio domiciled in Guernsey.’
Inclusivity and expertise
Makwetu said that her first focus in leading the investment team will be in recruiting the right people.
‘We’ve seen where the industry has come up short in terms of not being inclusive as far as talent is concerned, and not giving opportunities to black managers and women managers,’ she said. ‘There is scope for us to do that.
‘I also think that there is a big opportunity for including alternative assets in portfolios, given that traditional assets are not necessarily going to take you there anymore. We do require different kinds of thinking about portfolios, to improve on the traditional 60:40 mix.
‘So, if we get the right people in place in terms of expertise and inclusivity on the investment side, we are in a great space that is growing globally. There are opportunities not just in the institutional space, but also for retail investors looking to reach their objectives by adding alternative assets.’
AIP currently offers one product – the AIP NCIS Concentrated Arbitrage qualified hedge fund. It is a market-neutral strategy targeting a cash + 6% return.
‘It’s a relatively low-risk, largely quantitative strategy, mainly looking at arbitrage opportunities between holding companies,’ Visagie said. ‘It stays within sectors and doesn’t play longs and shorts in different industries. It’s a cash-plus type product, that is also more tax-efficient than sitting in cash longer term.’
AIP’s new hedge fund will be a multi-strategy product looking to meet investor demand for uncorrelated return profiles.
As one of only a handful of empowered managers in the alternatives space, AIP believes that there is a significant opportunity to provide solutions to institutional investors in particular.
‘There are only five empowered hedge fund managers in South Africa, which is a tiny number given that there are more than 50 managers with Cat IIA licences,’ Visagie said. ‘And if we look at our investor base on the institutional side, very few have taken up the 10% allocation to hedge funds that they are allowed. If anything, over the last few years the large institutions have been unwinding their hedge fund positions due to poor performance.’
AIP, therefore, sees an opportunity to offer solutions meeting particular objectives. Visagie also sees potential in the retail space.
‘We will offer daily dealing and be available on fund platforms, so it will look and feel like a unit trust at the end of the day,’ he said. ‘Hedge funds can work well to reduce volatility, especially for clients who have income needs. It helps for them to have an allocation to something that is not just traditional equity or giving the low returns you get from cash.’
In the private equity space, AIP is in the planning stages of launching a fund that will invest in South African technology companies with established cashflows.
by PATRICK CAIRNS
Posted 7 SEPTEMBER, 2021