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In 2003, Gryphon tasked Jan Meintjes with the function of managing the group’s capital. As part of this process Jan developed a solution to his capital management dilemma which allowed him grow the capital at low risk and in a “market neutral” manner. As such while he was allowed to invest in equities, his net position was neutral and his returns were not a function of the direction of the equity market.

A year later, the steady and stable performance of the portfolio led to market research as to the demand for a product of this nature in the market. As result, in July 2004, with a track record of 18 months, the Gryphon Market Neutral Equity Fund was opened for investment.

In line with Gryphon’s core-satellite approach to investing, the product’s offered by Alternative Investments focus on alpha generation and are satellite products.

Over time, the product range has been extended to include the Alpha Fund (launched on the 1st of January 2005) and the Falco Fund (still in development stage). While the characteristics of each fund is described in detail below, suffice to say that the Market Neutral Fund is our most conservative offering while the Falco Fund is the most aggressive offering.
At Gryphon our “clear benefits” approach to investing requires that we clearly identify (for the sake of our clients) the targeted risk / return profile for each of our products. This requires that we firstly design products that suite our clients needs and secondly manage each product to perform as designed. To date this has been the case and we view our commitment to product design as a strength which will stand us in good stead when markets are less benevolent to investors.

With the hedge fund industry being at a relatively early stage of its development in South Africa, the focus to date has been on the performance of individual funds. We believe, however, that in line with global trends that as the industry matures more attention will be paid to portfolio construction, i.e. the impact that a fund has on a portfolio rather just its performance per se. For this reason our market neutral funds are well placed, with low correlations not only to the underlying All Share Index, but also to other hedge funds products currently on offer.



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