In categories: Hedge Funds

NITROGEN FUND MANAGERS

The Nitrogen Nitrogen RCIS Retail Hedge Fund is a low volatility long/short equity hedge fund, managed on a fundamental basis with a value bias. The fund consists of two books: a long-term risk arbitrage book and a short-term arbitrage book. The long-term book takes advantage of risk-arbitrage opportunities where the manager views stocks as mispriced on a fundamental basis. The short-term book takes advantage of arbitrage opportunities available due to mispricing in the market, using a range of trading strategies. The fund’s investment universe includes JSE-listed and global stocks and derivatives on these. The fund targets low volatility with a maximum 42% net market exposure. The fund has been in operation for 15 years and over that period has outperformed the JSE ALSI with less than a third of the volatility and 82% positive months.

Investment team

The fund is managed by Rowan Williams. Rowan holds an MPhil (Cantab) and is a CFA charterholder with 25 years’ investment experience in equity markets and private equity.  Petri du Plessis is operations manager, responsible for operational management including treasury and reporting. He has a BCom Honours in Accounting from the University of Pretoria and is a registered CA(SA) and a CFA Charterholder. David Oberholzer and Willem Oldewage fulfil the roles of analyst and focus on fundamental analysis. David holds an MCom Investment Management from the University of Johannesburg as well as being a CFA Charterholder. Willem holds a BCom Honours degree in Investment Management and is a CFA Charterholder.

Investment terms

Hurdle rate: STeFI index money market rate
High water mark: Yes
Fund open: Yes
Min investment: R50,000
Management fee: 1.5%
Performance fee: 20% above STeFOCAD
Subscription: Monthly
Redemption: One month
Retail or qualified: RIF

Strategy

The fund aims to deliver superior risk-adjusted absolute returns in all market conditions by taking advantage of persistent structural inefficiencies based on the systematic mispricing of stocks, both on a short-term and long-term basis, with a strong emphasis on downside protection through rigorous fundamental analysis. Capital is allocated to trades using a proprietary risk model.

Strategy: Low volatility long/short equity
AUM: R600.7 million (end July 2023)
Currency: ZAR
Domicile: South Africa
Inception date: 1 August 2006

Service providers

Prime broker: Absa Capital Prime Services
Administrator: Apex Fund Services
Auditor: PwC
Legal advisor: Werksmans Attorneys
Manco: RealFin

Contact details

Nitrogen Fund Managers (Pty) Ltd,
Third Floor, Illovo Edge, 11 Harries Road,
Illovo, Sandton, Johannesburg

Fund manager: Rowan Williams
CEO: Rowan Williams
Marketing: Petri du Plessis

Email: nitrogen@nitrogenfm.co.za
Phone: +27 11 243 5046
Fax: +27 86 577 7211
Website: www.nitrogenfm.co.za

ISIN or ref code:
Bloomberg ID – ICAPNIT SJ EQUITY