South Africa could undergo an expansive jump in its hedge fund industry.
A Rand Merchant Bank report says the South African hedge fund industry could double in size over the next two to three years.
Since the beginning of 2005, the number of funds in South Africa jumped from 70 to 95, and the funds now manage about $2.15 billion.
And according RMB’s report, the rate of growth should continue at its present rate and could even increase as more and more South African investors gear their investments toward the unconventional funds.
But RMB reports that the most appealing area to financial institutions in the country is the supporting or prime broking business.
Prime broking, which offers IT support, risk management and securities lending services to hedge funds, is one of the fastest growing businesses for investment banks worldwide.