Previously, foreign funds utilising leverage as an investment strategy were not permitted to solicit investment in South Africa. Such funds could not be approved for distribution in terms of section 65 of the Collective Investment Schemes Control Act (CISCA), because they were not comparable to South African collective investment schemes in securities, which are more restricted.
In 2015, however, hedge funds were declared collective investment schemes in South Africa. As a result, it became possible for foreign funds with expanded investment powers to seek approval to be marketed here, either as qualified or retail hedge funds.
To date, only a handful of such foreign funds have successfully been approved in this way. ENSafrica assisted Franklin Templeton in navigating the process and successfully procuring retail hedge fund approval for two sub-funds of Franklin Templeton Investment Funds, a Luxembourg-registered SICAV.
For advice regarding the marketing of foreign funds in South Africa, contact Jessica Blumenthal.