Peregrine Capital leans on 28 years to back SA winners

Peregrine Capital, Africa’s oldest hedge fund, is drawing on 28 years of South African market experience to guide stock selection for 2026. The firm has increased positions in Capitec, mining stocks and companies tied to artificial intelligence, and has limited expansion across other African markets because of low liquidity.

Jacques Conradie, Peregrine’s chief executive, described the firm’s process as bottom-up stock picking based on local knowledge to track company performance through market cycles. “We are fundamentally bottom-up stock pickers; we have been investing in South Africa for almost 28 years, so we know the companies very well and how they will perform in different market cycles,” he said.

Conradie pointed to a large trade surplus driven by high commodity prices and relatively low oil costs, along with a stable political backdrop, as factors supporting a positive outlook for 2026 and drawing renewed interest from offshore investors.

A significant portion of Peregrine’s equity book is concentrated in mining and precious metals. Conradie noted steady fundamentals for gold and platinum and described them as able to perform across different macro conditions.

The firm has also raised exposure to parts of the AI ecosystem after its internal AI team observed improved model performance in systems such as Claude Code and Codex. He added that the team moved past earlier concerns about hyperscalers’ capital expenditure and increased holdings in areas expected to benefit from rising AI demand.

On regional expansion, Conradie noted: “We have tried to find appealing investments across equity markets but liquidity is just too low for meaningful capital deployment.” He said most African countries are net oil importers, which creates economic pressure when oil prices rise and complicates large-scale institutional investment.

Peregrine’s strategy combines long-term company selection with tactical increases in sectors where the firm sees structural growth, while keeping regional expansion cautious because of market size and liquidity constraints.