Fairtree Wild Fig Multi Strategy Hedge Fund Q4 2025 Investor Update

Introduction

The Fairtree Wild Fig strategy (“Wild Fig”) is our flagship multi-strategy balanced hedge fund range, designed to deliver equity-like returns with meaningfully lower drawdowns by combining uncorrelated alpha streams across equities, fixed income and commodities.

*Note: Reported fund performance throughout refers to the Fairtree Wild Fig Multi Strategy FR RIHF (unless otherwise stated). All returns are net of all fees. As the funds are managed in a similar manner, despite the regulatory differences between the two ZAR funds (QIHF and RIHF), over the fullness of time, we expect that the two funds will produce similar net returns. US dollar investors can access the strategy via the Cayman-domiciled Fairtree Wild Fig Multi-Strategy USD fund.

Performance

The Fairtree Wild Fig Multi Strategy FR RIHF (or “the Fund”) delivered a positive return of +8.1% for the fourth quarter. On a year-to-date calendar basis, the Fund returned +9.8%, marking a strong recovery after a challenging start to the year. The strategy remains true to its investment objective of compounding clients’ capital over the long term.

The Fund had a challenging start to 2025, with all three asset classes detracting from performance during the first quarter and following on the drawdown experienced in Q4 of 2024. This, however, was followed by a strong recovery, driven primarily by fixed income during Q2 and Q3 of 2025, and equities towards the latter part of the year, which resulted in a cumulative gain for the calendar year. The Fund remains highly diversified, enabling the strategy to pursue uncorrelated sources of alpha across a broad opportunity set.

Graph 1: 2025 Quarterly asset class attribution and cumulative fund performance

Source: Fairtree, Bloomberg. As of 31 December 2025. Fairtree Wild Fig Multi Strategy FR RIHF.

Macro backdrop

Momentum across global markets largely carried through into the fourth quarter, although the pace of gains moderated in the US as investors became more discerning amid elevated valuations and increasing policy uncertainty. From a macro perspective, global growth remained resilient but uneven, with disinflationary trends allowing major central banks to pause tightening cycles, albeit with policy rates held at restrictive levels. Inflation continued to moderate across developed markets, though services inflation and wage pressures remained sticky, reinforcing a higher-for-longer narrative. Geopolitical risks (including ongoing conflicts in Eastern Europe and the Middle East), as well as heightened trade and election-related uncertainty, contributed to episodic volatility, particularly in energy markets and risk assets.

However, global equity markets ended the year higher, supported by resilient earnings growth, continued expectations of easing financial conditions, and optimism around key technology themes, such as artificial intelligence, energy production, and automation. In US dollar terms, major indices delivered strong gains in 2025: S&P 500 (+17.7%), Nasdaq 100 (+20.7%), MSCI World (+20.5%), MSCI World ex US (+31.8%), Nikkei (+31.5%), and Euro Stoxx (+35.2%).

In the US, equities consolidated after the strong advances earlier in the year, with market leadership remaining concentrated in large-cap technology and AI-linked names. Corporate earnings continued to surprise positively, though the magnitude of beats narrowed, reinforcing a more selective market environment. Mixed labour signals and US economic data complicated the Federal Reserve’s policy view, having cut twice during the quarter (25bps in early November and again in December), bringing the Federal Funds rate down to 3.50-3.75% while signalling further easing, the pace of future policy adjustments contingent on inflation continuing its downward trajectory and the strength of the labour market. Less restrictive policy expectations, however, supported market performance, and concentrated investment in AI-related sectors, which helped offset declining momentum in underlying consumer and employment conditions in the broader economy. Although labour market conditions softened (unemployment rose to 4.6%), economic momentum remained strong, with Q3 GDP growth being revised higher (+4.3% annualised), driven by consumer spending, exports and fiscal support.

China showed early signs of macro stabilisation. Inflation rose to (+0.7%) in November, easing deflation concerns and marking the highest level since early 2024. The People’s Bank of China (PBOC) kept key rates unchanged, signalling confidence that existing stimulus measures are sufficient to meet growth targets. The urban unemployment rate remained stable at (+5.1%), suggesting labour market resilience. Equity markets responded modestly, reflecting cautious optimism around the sustainability of the recovery.

Locally, South African equities extended gains into Q4, rounding off a stellar year for the JSE All Share Index (+41.8%). Investor sentiment improved following the formal adoption of the 3% inflation target in the mid-term Budget speech. Furthermore, the improved fiscal outlook, removal from the FATF grey list and improving GDP growth metrics contributed to the positive sentiment. However, as in previous quarters, returns were driven by a relatively narrow group of sectors, as mining and resources counters rallied on the back of international commodity spot prices (Silver + 127%, Platinum +122%, Palladium +74.4%, Gold +63%, Copper +35.7%, Brent Crude -18.5%). Bond investors also enjoyed strong returns in 2025, with the JSE All Bond Index rising (+24.0%). The rand strengthened further against the greenback in Q4, ending the year (+13.0%) stronger against the US dollar, driven in part by the dollar weakness as the US Dollar Index returned (-9.5%) for the year.

Quarterly Performance

Graph 2: Q4 2025 asset class attribution

Source: Fairtree, Bloomberg. As of 31 December 2025. Fairtree Wild Fig Multi Strategy FR RIHF.

On an asset class level, the strong quarterly performance was attributable to positioning in equities and fixed income, while commodities detracted from performance.

Equity strategies were cumulatively the largest contributor to Fund performance, contributing (+4.8%) to the Fund during the quarter. Positioning in our South African directional long/short and market-neutral strategies delivered positive returns, while global market-neutral strategies marginally detracted. Positive attribution was primarily driven by sector positioning in financials, materials and healthcare, with consumer discretionary and general retailers detracting.

The combined fixed income strategies contributed (+3.5%) to the Fund’s performance for the quarter. The Fixed Income Fundamental strategy delivered another positive quarter (+3.8%), capping off a strong year for the strategy, while the Fixed Income Quantitative strategy detracted (-0.3%). As SA bonds rallied, the Fixed Income strategies generated returns through capturing the shift from restrictive to easing monetary conditions. Curvature trades in the belly and back of the yield curve contributed positively to the Fund, while selective hedging amongst the front end of the curve detracted. Selectively timed FX hedges also added incremental alpha.

The commodities strategy continued to face headwinds during Q4 (-0.1%), reflecting a challenging operating environment over the course of the year. Performance was primarily influenced by pronounced supply-side constraints in certain segments of the market, driven by trade restrictions, regulatory frictions and cross-border logistical disruptions. These factors limited the availability of key inputs, tightening market balances and driving sharp price movements. While some offset was provided by substitution effects and adjustments in end-market supply, these were insufficient to fully absorb the shock, resulting in upward price pressure that weighed on strategy performance. While the strategy struggled throughout the year, it remains a valuable diversifier and is positioned for supply-driven upside should geopolitical or weather-related shocks re-emerge in 2026.

Graph 3: Q4 2025 strategy attribution

Source: Fairtree, Bloomberg. As of 31 December 2025. Fairtree Wild Fig Multi Strategy FR RIHF.