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| SEGMENTAL
REVIEW |
| SPECIALISED
FUNDS |
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| Performance
for the year |
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2006 |
2005 |
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US$m |
US$m |
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| Revenue and other income |
6,5 |
5,5 |
| Profit from operations |
1,3 |
1,2 |
| Closing capital employed |
75,0 |
20,6 |
| Return on equity before |
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| taxation (%) |
6,7 |
5,8 |
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| Overview
of Specialised Funds |
| The Specialised Funds division of Brait comprises: |
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the management of South African institutional
and high net worth third-party capital in hedge fund products; |
| • |
the seeding and supporting of emerging hedge funds,
and the provision of customised infrastructure, risk management
and business support to investment boutiques offering
hedge fund products; and |
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private equity investments in select investment boutiques
that offer the development potential of a long-term investment
franchise within active management. |
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| Brait Specialised Funds is the largest institutional
fund of hedge fund business in South Africa, with more than
five years experience in seeding and supporting emerging hedge
fund managers. We invest alongside our clients in well-diversified
products, with specific riskadjusted return targets, which offer
important portfolio diversification benefits to traditional
portfolios. Considerable industry experience and significant
investments in infrastructure and risk management capabilities
are designed to provide institutionally acceptable hedge fund
solutions. |
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| Revenue (excluding investment
gains) |
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Profit from
operations (including investment gain)
and ROE |
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| Financial
Results and Commentary |
Specialised funds income, which consists of fees
earned from the management of third-party capital in the group's
hedge funds and investment returns generated from Brait's own
seed capital, increased by 18% to US$6,5 million from US$5,5
million the previous year. Operating earnings increased by 8%
to US$1,3 million from US$1,2 million the previous year.
Performance during the year was satisfactory, with Brait Absolute
SA Fund (Brait Absolute) continuing to outperform three-year
rolling return objectives, returning 6,6% above cash and 11,8%
ahead of inflation, whilst limiting volatility to 2,6%. Brait
Absolute extended its consecutive positive monthly returns to
44 months, while correlation and beta to the All Share Index
remained very low at 0,25 and 0,06 respectively. |
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Return over 3 years, 1
year (to March 05) and
1 year (to March 06) |
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