List of Hedge Funds in Kenya

Do you want to learn more about hedge funds in Kenya? Continue reading to discover out.

What are hedge funds?

Hedge funds are pooled securities that trade in a variety of relatively liquid assets and are able to employ more sophisticated trading, portfolio construction, and risk management strategies, such as short selling, leverage, and derivatives, in an effort to increase performance.

The funds are administered by expert managers who maximize the profits while minimizing the dangers. Depending on the nature of the fund, eligible investors, institutions, or fund managers themselves may be able to participate.

For example, hedge fund managers present a plan to investors, and those who invest expect the manager to follow through on that strategy.

This technique may entail becoming a hedge fund that is exactly long or short on all of its stock. The funds can range from ordinary stock to patents. The funds are organized as a Limited Partnership (LP) or a Limited Liability Company (LLC) (LLC).

An LP is a business form in which the partners are only liable for the amount of money invested. At the same time, an LLC is a corporate form in which stockholders are not personally liable for the company’s liabilities.

In most cases, all funds share a common aim. They strive for market direction neutrality. They all attempt to make money, regardless of whether the market is up or down.

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Typically, fund managers behave more like traders.

Kenyan Hedge Fund Structure

Hedge funds are organized as follows.

– They are only available to accredited investors with a $1 million net worth or a $200,000 yearly income.
-Public investments in the funds include equities, bonds, and mutual funds. They can also invest in real estate, food, currency, art, or anything else that will help the fund fulfill its objectives.
-They frequently use other funds, such as borrowed money, to try to boost returns.
-The hedge funds have a “2 and 20” manager compensation system, which provides the hedge fund manager with 2% of the assets and a 20% incentive fee on profits each year.

Types of Hedge Funds in Kenya


In Kenya, we have four collective hedge funds, which are as follows:

1. Global Hedge Funds

Macro hedge funds make long-term investments in stocks, bonds, futures, options, and currencies.

Their primary objective is to maximize changes in macroeconomic variables. Consider global trade, interest rates, and policy.

2. Equity Hedge Funds

The fund is also known as a short/long equity fund. They try to protect themselves from equities market drops.

The fund invests in equities and stock indices before selling them short if they are overvalued.

Typically, fund managers invest in inexpensive companies before dividing their investments between huge stocks and shorting other equities.

3. Arbitrage Funds Based on Relative Value