Ex-Ziff Hedge Manager Steyn Shorts Mine Blaster to Beat JSEby
South African fund gains 24% this year versus market's 4%
Fund also shorts coal producer Exxaro, bets on Rhodes Food
Steyn Capital Management, a Cape Town-based hedge-fund company, produced returns almost six times higher than the South African stock market this year by betting that shares in explosives-maker Omnia Holdings Ltd. and coal miner Exxaro Resources Ltd. would fall while Rhodes Food Group Pty Ltd. would gain.
The firm’s South African Large Cap Fund returned 1.3 percent last month, while the JSE All Share Index fell 4.1 percent. The fund gained 24 percent this year through November, outpacing the 4.2 percent advance in the benchmark index.
The fund had net market exposure -- the sum of bets stocks would rise minus wagers that other shares would fall, known as shorting -- of about 40 percent, company founder Andre Steyn said by e-mail on Wednesday. The firm has 7.7 billion rand ($509 million) under management and is targeting 9 billion rand in next year’s first quarter, he said.
“We’re delighted with this result for our investors, particularly given it was achieved with less than half the average market exposure and relatively light gross exposure levels of approximately 150 percent of net asset value,” said Steyn, who began his career at Ziff Brothers Investments LLC in New York. “Our short book contributed meaningfully during the month.”
Omnia, which also produces fertilizer and industrial chemicals, reported Nov. 24 that first-half profit slid 18 percent after mining revenue fell. Exxaro said last month that full-year headline earnings will probably be 20 percent less than 2014. Rhodes Food will pay its first dividend after full-year net income more than doubled to 169.7 million rand, it said in November.