Peregrine Capital after 28 years in South Africa ups AI bets

Peregrine Capital has boosted holdings tied to artificial intelligence while keeping the bulk of its assets deployed in South Africa after nearly three decades operating in the country, CEO Jacques Conradie said. The fund has avoided large-scale expansion into other African equity markets because of limited liquidity.

The firm’s strategy relies on bottom-up stock selection and deep company knowledge built over 28 years in South Africa. Conradie pointed to early investments such as Capitec, which grew into one of the country’s largest banks by market value, and to a long history of mining exposure in gold and platinum.

Conradie cited recent macro factors that supported the firm’s outlook before market disruption: a trade surplus driven by strong commodity prices, relatively low oil costs for an oil-importing economy, and a political backdrop that drew renewed offshore investor interest. He said these conditions were expected to support performance into 2026.

Liquidity in most African markets remains the primary reason Peregrine has not shifted significant capital outside South Africa. “Liquidity is just too low for meaningful capital deployment,” Conradie said, adding that many regional economies are net oil importers and therefore face balance-of-payments pressure when oil prices rise.

A large portion of the fund’s equity book has moved toward companies that could benefit from AI. An internal AI team reported material improvements in model performance for tools such as Claude Code and Codex, prompting increased exposure to parts of the AI supply chain. Conradie said the team became less concerned about capital expenditure by major cloud providers as demand for AI services and infrastructure appeared set to grow.

Conradie also highlighted the role of investor behaviour in decision-making, noting the importance of understanding market emotions during gains and losses. He described Peregrine’s approach as concentrated positions in well-researched domestic companies, complemented by selective sector bets in mining and the AI ecosystem.

The shift toward AI exposure, Conradie said, reflects a strategic emphasis within the firm’s existing geographic focus rather than an effort to expand its footprint across the continent. The firm continues to prefer markets and assets where it can place institutional-sized capital and monitor company performance closely.