UPDATE: Unsigned letter sent to investors, details three investments.
JOHANNESBURG - A letter to investors in a scheme run by Herman Pretorius has confirmed the death of the former hedge fund boss. The unsigned communication, published in full below, has left unanswered questions over what Pretorius's clients are invested in. It lists three investments, only two of which were previously known to Moneyweb. It does little to disclose the nature of the investments or who is left to manage them in the wake of Pretorius's death.
On Thursday night, Pretorius allegedly shot his former business partner Julian Williams dead in his Cape Town offices, then turned the gun on himself.
Pretorius used to be involved with a hedge fund called the Abante Statistical Arbitrage. At the time of his death he ran an unregulated investment scheme called the Relative Value Arbritrage Fund (RVAF), which many investors believed to be a hedge fund.
Pretorius had been due to attend a meeting of investors in Moorreesburg on the evening of his death. Investors were informed that the event had been cancelled because Pretorius was in a meeting with Williams.
Earlier this month Moneyweb reported that Pretorius was involved in a war of words with Williams over an unlisted company called SA Superalloys. See Former hedge fund boss in dividend dispute. Williams is a director of SA Superalloys. Pretorius is not.
Pretorius had sold preference shares in SA Superalloys to about 500 private investors.
SA Superalloys stopped paying dividends this year. Pretorius accused Williams of failing to answer his questions about how investors’ money had been spent. He suggested that Williams may have used some of the money to fund Basileus Capital.
Williams responded that Pretorius had put pressure on him to pay dividends when the company was not in a position to do so. He also said that Pretorius was trying to divert attention from his unregulated investment scheme, the Relative Value Arbitrage Fund.
Basileus Capital has about 50 employees. It is responsible for sourcing investments for JSE-listed preference shareBK One (JSE:BK1P). One of BK One’s investments is Avalloy, a subsidiary company of SA Superalloys.
Pretorius has a very loyal following among wealthy investors in small Western Cape towns such as Moorreesburg, Porterville, Hopefield, Malmesbury, Durbanville and Riversdale. His Relative Value Arbitrage Fund had reported excellent returns to investors but there is no known way of verifying if these returns are genuine. Pretorius is not registered with the FSB and the fund has no third party administrator.
In an apparent attempt to calm investor fears, a communication was distributed to investors by e-mail. The author is unknown; the letter has no letterhead or signature.
The letter details three investments, SA Superalloys, the RVAF and Asarja (Pty) Ltd. Of these, only the first two were previously known to Moneyweb. The letter, which can be read in full below, states that directors of Asarja will continue to manage the affairs of this entity and will “strategise with the current opportunities available.”
A company search for Asarja reveals three current directors: Herman Pretorius, David Lombard and Siegmund Thetard. The auditors are Immelman Ferreira Incorporated.
Investors were told that the trustees of the fund (who remain unidentified) will provide feedback to investors and “where necessary appoint the appropriate experts in order to do the necessary due diligence”.
Letter
27.07.2012
With great sadness we want to inform you of the sudden death of Herman Pretorius.
We are currently assisting the police force with their investigation and will provide the necessary feedback to our investors as soon as possible.
The current investment opportunities of Abante Group will be handled as follows:
1. Asarja (Pty) Ltd
The directors of this company will continue in managing the current affairs of this entity and will strategize with the current opportunities available.
The directors of this company will continue in managing the current affairs of this entity and will strategize with the current opportunities available.
1. SA Superalloys(Pty) Ltd/ Avalloy (Pty) Ltd.
We will provide feedback to investors where we can then decide on a way forward in terms of Avalloy.
2. RVA Fund
The trustees of the fund will provide feedback to investors and where necessary appoint the appropriate experts in order to do the necessary due diligence.
The trustees of the fund will provide feedback to investors and where necessary appoint the appropriate experts in order to do the necessary due diligence.
We trust that we can rely on the co-operation and patience of our investors until we provide further feedback.
