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This bird of prey must be getting a little hungry. The financial markets – here and overseas – on which it feeds have been difficult to pin down. Despite that, Peregrine put out a decent set of interim results (to end-September 2010). But now it needs more to get into full flight. Peregrine Holdings [JSE:PGR] is probably best known in South Africa for the number of single manager and fund-of-hedge-funds it runs. On the private client side it will also be known through Citadel, a useful business to have in the current climate, as it tends to provide stable annuity-type income the group is looking to increase. However, from a perception point of view hedge funds are still viewed with suspicion in some quarters, despite the redrafted Regulation 28 of the Pension Funds Act that will allow retirement funds to invest a higher percentage of portfolios in hedge funds.
There are other concerns. Peregrine notes the ongoing uncertainty about the regulation of hedge funds in both SA and Europe, saying that uncertainty has had a more negative effect on the local than the global industry. It does cloud the outlook for hedge funds and may put off serious retail investors, who should at least have part of their money in hedge funds.
But it’s issues such as this and hard to predict financial markets, which for Peregrine includes equities, fixed income, currencies and commodity prices, that have weighed down on its share price. It’s lost a little more than 10% over the past year, putting the share on a fairly attractive forward earnings multiple of around eight times.
Though Peregrine is essentially a private client and asset management group, it has good diversification in what from the outside might seem a limited range of activities that stretch from wealth management to asset management, broking and structuring, with a significant presence offshore. In its latest results, income from those various sources was roughly equal.
That’s one reason why the share is worth buying. Activities will always depend to a large extent on what the markets are doing. But when financial markets start to play ball again expect the share price to fly.
There are other concerns. Peregrine notes the ongoing uncertainty about the regulation of hedge funds in both SA and Europe, saying that uncertainty has had a more negative effect on the local than the global industry. It does cloud the outlook for hedge funds and may put off serious retail investors, who should at least have part of their money in hedge funds.
But it’s issues such as this and hard to predict financial markets, which for Peregrine includes equities, fixed income, currencies and commodity prices, that have weighed down on its share price. It’s lost a little more than 10% over the past year, putting the share on a fairly attractive forward earnings multiple of around eight times.
Though Peregrine is essentially a private client and asset management group, it has good diversification in what from the outside might seem a limited range of activities that stretch from wealth management to asset management, broking and structuring, with a significant presence offshore. In its latest results, income from those various sources was roughly equal.
That’s one reason why the share is worth buying. Activities will always depend to a large extent on what the markets are doing. But when financial markets start to play ball again expect the share price to fly.
