| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| 16.8% | -1.84% | -0.35% |
The Steyn Capital FR QI Hedge Fund declined 1.84% in Q2 2026, bringing YTD returns to -0.35%, while maintaining an average beta-adjusted net exposure of 56%. The quarter was dominated by the Iran conflict and closure of the Strait of Hormuz, which created significant market volatility before a ceasefire was reached. Top contributors included Grindrod and Sun International, both reporting strong results, with Grindrod benefiting from port volume demand and Transnet reform prospects, while Sun International gains online gaming share. AECI contributed as its transformation programme gains traction. Detractors included Pan African Resources as gold corrected after a strong rally, though the manager added on weakness given strong fundamentals. PGM producers declined on softer prices. Emerging markets exposure detracted as technology and industrial shorts moved against the fund. The manager reduced exposure during peak uncertainty then gradually re-deployed as risks receded, exiting lower-conviction retail positions while adding idiosyncratic special situations. The positive South African outlook has been deferred by higher fuel costs pressuring consumers, but not cancelled.
The fund pursues a value-oriented long/short strategy in South African equities with emerging markets exposure, seeking to maximize investor capital by buying securities trading materially below intrinsic value and shorting those trading materially above intrinsic value, while maintaining disciplined risk management through defined exposure limits.
The manager believes the positive near-term outlook for South Africa has been deferred rather than cancelled, with higher fuel costs pressuring consumers and pushing out rate cuts. While the worst-case energy shock scenario appears to have been avoided with the Strait of Hormuz reopening, ongoing negotiations between the US and Iran remain inconclusive. Financial market risk appetite has returned forcefully, with global equities rallying. The manager continues to monitor geopolitical risks while selectively positioning in idiosyncratic and special-situation opportunities.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Jul 23 2026 | 2026 Q2 | AFE.J, GNDJ.J, NPH.J, PAN.J, PMR.J, SUI.J | commodities, emerging markets, Geopolitical Risk, Long/Short, South Africa, special situations, value | - | Steyn Capital's long/short South African equity fund declined 1.84% in Q2 2026 as Middle East conflict created volatility. Strong results from Grindrod, Sun International, and AECI drove gains, while gold and PGM positions detracted on commodity price weakness. The manager tactically reduced exposure during peak uncertainty then redeployed into special situations as geopolitical risks receded. South Africa's positive outlook remains intact despite near-term inflation pressures from higher fuel costs. |
| Apr 18 2026 | 2026 Q1 | 0700.HK, AEL.JO, GLEN.L, NPN.JO, PAN.JO, PRX.AS | emerging markets, Geopolitical, gold, Long/Short, Mining, oil, South Africa, value |
AEL.JO GLEN.L PAN.JO NPN.JO PRX.AS |
Steyn Capital delivered 1.53% net returns in Q1 2026 despite geopolitical turmoil from Iran conflict. Strong performance from AECI and Glencore offset weakness in Naspers/Prosus positions. Manager reduced exposure amid Strait of Hormuz closure uncertainty while maintaining conviction that South African and emerging market equities remain undervalued for long-term outperformance. |
| Jan 18 2026 | 2025 Q4 | AEG.JO, ANG.JO, NHM.JO, NPN.JO, PRX.JO, TEN.JO, TGO.JO | gold, Hedge Fund, Long/Short, Platinum, South Africa, value | - | Steyn Capital delivered 18.26% net returns in 2025, led by precious metals exposure during gold and platinum rallies. The manager sees abundant opportunities in undervalued South African equities amid supportive commodity markets and potential emerging market rotation. With 66% net exposure and disciplined short book protection, the fund is positioned for continued value creation in an attractive valuation environment. |
| Nov 19 2025 | 2025 Q3 | 0700.HK, AIP.JO, ANG.JO, COH.JO, EPE.JO, GND.JO, LBR.JO, NHM.JO, PPH.JO, PRX.AS, RNI.JO, ZED.JO | emerging markets, gold, Long/Short, Reform, South Africa, value | - | Steyn Capital delivered 7.28% in Q3 2025 by deploying capital in undervalued South African businesses amid accelerating reform momentum. Precious metals rally drove performance while merger arbitrage positions provide hedging. The fund positions for multi-year emerging market outperformance over speculative US markets, maintaining 91% net exposure with substantial short protection. |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2026 Q2 |
Middle East ConflictThe Iran conflict and closure of the Strait of Hormuz created significant uncertainty during Q2, causing commodity and financial market volatility. By quarter end, a ceasefire was in place and shipping resumed, with the worst-case energy shock scenario avoided. However, negotiations between the US and Iran remain inconclusive with key issues unresolved. |
Iran Strait of Hormuz Energy Shock Geopolitical Risk |
GoldGold corrected following its strong rally through 2025 and into Q1 2026. Pan African Resources declined as gold prices softened, though the business remains highly profitable and cash generative at spot prices with a strong production profile. The manager added to the position on weakness. |
Gold Miners Precious Metals Pan African Resources | |
Platinum Group MetalsPGM producers Northam and Valterra declined during the quarter as PGM prices softened. These holdings are described as modest positions within the portfolio. |
PGM Northam Valterra Precious Metals | |
South AfricaThe positive near-term outlook for South Africa has been deferred rather than cancelled. Higher fuel costs fed through to consumer inflation, pressuring household disposable income and pushing out the interest rate outlook. The manager reduced exposure during the conflict uncertainty, then gradually increased exposure as risks receded, while exiting lower-conviction retail longs and adding idiosyncratic special situations. |
Consumer Inflation Interest Rates Retail Special Situations | |
Emerging MarketsGlobal emerging markets exposure detracted from returns in Q2, with several shorts in Technology, software and Industrial sectors moving against the fund. This was only partially offset by gains from Technology longs and other positions including an Eastern European Bank and Chinese Gaming company. East Asian emerging markets performed strongly by quarter end, driven by AI beneficiaries in semiconductor hardware. |
Technology Semiconductors AI Asia | |
CasinosSun International reported strong results and continues to gain share in the fast-growing online market, while its land-based casino operations are beginning to show signs of stabilisation. The stock was a top contributor during the quarter. |
Online Gambling Gaming Sun International | |
LogisticsGrindrod was the largest contributor during the quarter, reporting strong results and continuing to benefit from strong volume demand across its port and terminal operations. A trading update towards quarter end confirmed this strength. The company remains well positioned for further private-sector participation reform at Transnet. |
Ports Transnet Infrastructure Grindrod | |
Specialty ChemicalsAECI contributed meaningfully during the period after reporting strong results. The market has gained confidence in the group's transformation programme, with portfolio simplification and cost actions showing through in improved profitability in the core mining business. The exit of non-core assets has strengthened the balance sheet and sharpened focus. |
Mining Services Restructuring AECI | |
| 2026 Q1 |
GoldPan African Resources contributed positively during the quarter, supported by strong gold prices despite a correction in March following the outbreak of war in the Middle East. The company reported strong earnings in February and continues to benefit from a healthy production profile and low all-in sustaining costs in a high gold price environment. |
Gold Gold Miners Precious Metals Mining Commodities |
OilOil positions were impacted by geopolitical developments in Iran and the closure of the Strait of Hormuz, resulting in energy price shocks. The manager exited an oil short position in early March after the company benefited from improved sentiment and positive operating leverage to higher oil prices following Middle East developments. |
Oil Energy Geopolitical Risk Middle East Commodities | |
Emerging marketsThe fund maintains exposure to global emerging markets through both long and short positions. Emerging Markets exposure contributed positively to returns in the quarter, driven primarily by the performance of the short book and Rand weakness over the period. |
Emerging Markets Global Currency Diversification | |
| 2025 Q4 |
GoldGold prices drove a blistering rally that contributed to the majority of local index returns. The manager continues to hold exposure with a positive view on gold, while actively managing position sizes due to volatility concerns in single commodity miners. |
Gold Miners Precious Metals Commodity Prices |
PlatinumPlatinum prices experienced strong performance alongside gold. Valterra Platinum was the largest contributor, benefiting from both strong PGM prices and improved free float after Anglo American's accelerated book build removed stock overhang. |
Platinum Group Metals Mining PGM | |
ChinaChinese stocks benefited from improved sentiment, with Prosus and Naspers gaining alongside their Tencent holding. The eCommerce portfolio continues performing strongly, and value-accretive buyback programs are being executed. |
Chinese Equities Tencent eCommerce | |
Emerging MarketsUS dollar weakness provided supportive backdrop for broader emerging markets, which posted their strongest calendar returns since 2017. Manager expects continued diversification toward emerging markets including South Africa due to attractive valuations and light investor positioning. |
Dollar Weakness Diversification Valuations | |
South AfricaSouth African equities continue to trade at attractive valuations with supportive commodity markets and potential for modest global growth improvement. Political developments around local government elections in late 2026/early 2027 will come into sharper focus. |
Valuations Politics Local Elections | |
| 2025 Q3 |
ValueThe fund continues to deploy capital in exceptional opportunities in high-quality, undervalued 'SA Inc' businesses. The manager believes the opportunity-set among high-quality 'SA Inc' businesses remains extremely attractive, with many investors underestimating the potential of reform agenda to unlock latent growth in the domestic economy. |
Undervalued SA Inc Reform Domestic Quality |
GoldPrecious metals continued their blistering rally in the quarter and have driven much of the local index return for the year to date. After rallying 182% for the year, Precious Metals miners now comprise almost 25% of the JSE ALSI index. The fund has a positive view on both Gold and Platinum. |
Precious Metals Rally JSE Mining Platinum | |
South AfricaThe fund focuses on South African equities with reform momentum at Transnet continuing at an encouraging pace. The manager believes many investors are underestimating the potential of the reform agenda to unlock latent growth in the domestic economy and sees exceptional opportunities in 'SA Inc' businesses. |
Reform Transnet Domestic Economy JSE Infrastructure |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| Apr 18, 2026 | Fund Letters | Steyn Capital FR QI Hedge Fund | AEL.JO | AECI | Information Technology Services | Specialty Chemicals | Bull | New York Stock Exchange | Asset Disposal, cash flow, debt reduction, materials, Mining Services, South Africa, specialty chemicals, turnaround | Login |
| Apr 18, 2026 | Fund Letters | Steyn Capital FR QI Hedge Fund | GLEN.L | Glencore | Other Industrial Metals & Mining | Diversified Metals & Mining | Bull | New York Stock Exchange | coal, Commodity Trading, Diversified Mining, energy, geopolitical, materials, Supply Shock, Volatility | Login |
| Apr 18, 2026 | Fund Letters | Steyn Capital FR QI Hedge Fund | PAN.JO | Pan African Resources | Gold | Gold | Bull | New York Stock Exchange | Gold, Low-cost producer, materials, Mining, Precious Metals, Production Profile, South Africa, Sustaining Costs | Login |
| Apr 18, 2026 | Fund Letters | Steyn Capital FR QI Hedge Fund | NPN.JO | Naspers | Internet Retail | Interactive Media & Services | Bull | New York Stock Exchange | buyback, China exposure, Communication Services, Discount Arbitrage, holding company, technology, Tencent, Value | Login |
| Apr 18, 2026 | Fund Letters | Steyn Capital FR QI Hedge Fund | PRX.AS | Prosus | Internet Retail | Interactive Media & Services | Bull | Euronext Stock Exchange | buyback, China exposure, Communication Services, Discount Arbitrage, holding company, technology, Tencent, Value | Login |
| TICKER | COMMENTARY |
|---|---|
| GNDJ.J | The largest contributors during the quarter were Grindrod and Sun International, both of which reported strong results in March. We believe these results were initially overshadowed by the outbreak of the Iran conflict in late February. As the quarter progressed, and the market grew more confident in the prospect of a swift resolution, the improving outlook for both companies began to be reflected in their share prices. Grindrod continues to benefit from strong volume demand across its port and terminal operations, as evidenced by a trading update published towards the end of the quarter, and remains well positioned for further private-sector participation reform at Transnet. |
| SUI.J | The largest contributors during the quarter were Grindrod and Sun International, both of which reported strong results in March. We believe these results were initially overshadowed by the outbreak of the Iran conflict in late February. As the quarter progressed, and the market grew more confident in the prospect of a swift resolution, the improving outlook for both companies began to be reflected in their share prices. Sun International continues to gain share in the fast-growing online market, while its land-based casino operations are beginning to show signs of stabilisation. |
| AFE.J | AECI also contributed meaningfully in the period, similarly reporting strong results in the prior quarter. The market has continued to gain confidence in the group's transformation programme. Portfolio simplification and cost actions are beginning to show through in improved profitability in the core mining business, while the exit of non-core assets has strengthened the balance sheet and sharpened the group's focus. |
| PMR.J | Further contributors included an energy short, which traded down on the de-escalation of Middle East conflict, and Premier, which rallied after results demonstrated another period of strong execution. The latter continues to expand margins through disciplined capital allocation, highlighting the attractive returns available from efficiency improvements. Its recently completed acquisition of RFG Holdings extends this pipeline of self-help opportunities and should provide scope for further earnings growth. |
| PAN.J | Pan African Resources declined as gold corrected following its strong rally through 2025 and into the first quarter of this year. The business remains highly profitable and cash generative at spot prices, with a strong production profile, and we added to the position on weakness. |
| NPH.J | Our other modest holdings in PGM producers, Northam and Valterra, also declined during the quarter as PGM prices softened. |
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