Capricorn Fund Managers is part of the Capricorn Group, was born out of the Hollard Insurance Group which is the largest unlisted insurer in South Africa. Capricorn has offices in Johannesburg and London with substantial private equity interests. In 2003 Capricorn launched the Hollard Stable Fund, a South African long/short equity hedge fund with a strong focus on capital preservation. The fund has had no down year since launch in 2003 and returned 8.5% in 2014 with a CAGR since inception of 16.0%.
The Capricorn GEMS fund, launched in March 2008, is a global emerging market fund with a bias to large cap. The fund had only one down year in 2011 (-2.9%) which was nicely compensated in 2012 when the fund was up 27.4%. In 2014, the fund was up 9.2%, achieving a CAGR since inception of 11.6%. Capricorn also runs their Performer fund which offers investors similar exposure to the Hollard Stable investment themes but aims for a higher return by following a more aggressive risk exposure strategy. The Performer fund has a CAGR since inception of 30.3%.
In this Opalesque.TV BACKSTAGE video, Matthew Auerbach talks in detail how Capricorn’s research process and risk management (“Knowing when to dial down risk”) contributed to the funds’ significant outperformance. He also shares insights about what he believes is Capricorn’s edge: A different way of looking at companies, together with a “capital preservation ethos”. Interestingly, all of GEMS team members grew up in emerging markets, which obviously is a strong base for professional emerging markets investors. Capricorn’s funds are available in multiple currencies and also as managed account and in the UCITS fund format.
Matthew Auerbach joined Capricorn Fund Managers in 2005 as a fund manager. On completion of his accounting articles in the financial services division of Ernst and Young, Matthew joined the equity derivatives team at UBS Warburg. He moved to African Merchant Bank where he managed a geared long/short equity market neutral fund. Matthew came tenth in Part 1 of the Qualifying examination and spent a year doing academic articles, prior to joining Ernst and Young. Apart from his coverage of South African themes, companies and relationships, Matthew is primarily responsible for risk management and portfolio construction.