The Protea International hedge fund delivered a 45.4% return in 2025, its strongest calendar-year performance since launch, driven by stock-specific alpha rather than broad market exposure, according to a report by CityWire citing portfolio manager Jean Pierre Verster.
The dollar-denominated gain significantly outpaced the FTSE Developed World index, which rose 22.3% over the same period. Verster said performance reflected disciplined security selection across a highly diversified long-short portfolio, rather than a directional market call.
European bank stocks were the largest contributors, with BBVA, Santander and UniCredit leading gains. The fund began building positions in the sector in late 2023, following the sell-off triggered by stress in the US banking system, allowing it to acquire shares at what Verster described as compelling valuations.
Selective US equity exposure also contributed, particularly through long positions in large, established companies often viewed as technology-adjacent, combined with short positions in more speculative names. That divergence widened in early 2025, benefiting the portfolio’s long-short structure.
Additional gains came from three South African special situations held within the international portfolio — Barloworld, Adcock Ingram and MAS plc — where corporate actions supported returns.
Despite the strong performance, Verster said gains were broadly distributed, with the fund holding around 200 positions on average during the year. Only two positions detracted more than one percentage point from returns, both shorts: the ARK Innovation ETF and Jumia. A long position in Novo Nordisk was also a modest detractor following patent and competitive setbacks.
Verster addressed the fund’s relatively high cash balance, noting it reflects the mechanics of running a long-short portfolio rather than a defensive stance. Net equity exposure stood at approximately 63% at year-end, lower than historical averages but not driven by a top-down market view.
The fund remains benchmark-agnostic and does not seek to forecast macro or market outcomes, Verster said, instead relying on diversification, position sizing and risk control to navigate different market environments.
