south african hedge fund The industry closed 2025 on a strong note, with assets under management, excluding funds of funds, increasing to R216 billion. This represents a 17% increase to R185 billion at the end of 2024, according to annual figures released by the Association for Savings and Investments South Africa (Asisa).
The assets were spread across 219 hedge funds managed by 13 companies with hedge fund schemes.
Asisa Hedge Funds Standing Committee convener Hayden Reinders says net inflows of R6 billion contributed to the growth, but the real driver was market performance. He highlights a significant change in 2025: “A notable growth in 2025 was the South African retail hedge fund category, which overtook the South African qualified investor hedge fund category in size, with 56.6% of assets under management in retail hedge fund portfolios at the end of December 2025.”
According to Asisa, when hedge funds were regulated a decade ago, they were divided into two categories: SA Retail Hedge Funds and SA Qualified Investor Hedge Funds. For most of that period, qualified investor funds dominated, ending 2024 with 56% of assets. However, retail hedge funds are strictly regulated in terms of risk and investment scope, and are accessible to investors who can afford a minimum lump sum of R50 000. In contrast, Qualified Investor funds require a minimum of R1 million and are aimed at investors with a deep understanding of hedge fund strategies and risks.
Reinders notes that retail investors invested extensively in 2025, with retail hedge funds recording R9.1 billion in net inflows. Meanwhile, qualified investor hedge funds saw net outflows of R4.3 billion.
Asisa says that the priorities of investors have also changed. Hedge funds are classified based on strategy: long-short equity, multi-strategy, fixed income and others. Historically, long-short equity portfolios were the most popular, but in 2025, investors gravitated toward multi-strategy portfolios. Retail long-short equity hedge funds recorded net outflows of R1.7 billion, while qualified investor long-short equity funds saw outflows of R5.6 billion.
The multi-strategy hedge fund, which blends different asset classes and strategies, attracted record inflows of R7.5 billion from retail investors and R1.1 billion from qualified investors. Retail fixed income hedge funds also drove R3.3 billion in net inflows, while inflows into the retail “other” category remained flat. It said that in the qualified investor sector, fixed income hedge funds recorded modest inflows of R226 million, while the “other” category saw outflows of R46 million.
Looking ahead, Asisa says, the National Treasury's recent budget review acknowledged that collective investment schemes and retail hedge funds are well regulated and important for savings. The revised proposals on taxation are expected to encourage savings and provide greater certainty. Reinders says this is likely to benefit retail hedge funds and encourage further participation. The Treasury also indicated that qualified investor hedge funds would be considered separately in the tax regime, with further industry consultation planned.
“We are also optimistic that the Financial Sector Conduct Authority Board will resume its review of Notice 90. In its current form, BN90 prevents long-term unit trust portfolios from investing in hedge funds, even though they are also regulated as collective investment schemes, and future inclusion may also allow further investment in retail hedge funds, which will be welcomed by the industry,” Reinders says.
The hedge fund industry is entering 2026 buoyed by strong retail inflows, changing investor preferences and the promise of regulatory clarity.
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