Opalesque Industry Update - UCITS Hedge Funds reveals that the alternative UCITS sector has grown significantly in recent
years, particularly following the global financial markets events of 2008. In 2002, UCITS hedge funds became possible
with the UCITS III directive; Preqin now tracks over 550 UCITS vehicles. |
UCITS hedge funds increasingly appeal to institutional investors due to their regulated, transparent and liquid format. Although the vast majority (86%) of institutional investors in UCITS-compliant hedge funds are based in Europe, the structure is now being utilized by investors in other regions worldwide, with North America and Asia-Pacific home to 8% and 5% of UCITS investors respectively.
Other Key Facts:
• More than 70% of UCITS hedge funds made gains over the three-year period to the end of December 2012
and more than half of these posted net returns exceeding 10%.
“Although alternative UCITS funds remain a niche part of the industry, representing around 7% of all hedge funds in the market today, they are an increasingly important part of the hedge fund landscape as we move into an era of regulation in the alternatives space,” said Amy Bensted, Head of Hedge Fund Products. “UCITS hedge funds have demonstrated a capacity to deliver absolute returns over the long term, while maintaining a low risk profile relative to equity markets. The use of the UCITS structure could grow further in the coming years as investors look for alternatives to traditional hedge funds and the larger investors, such as public pension funds, increase their exposure to UCITS funds. However, the limited universe, lower returns and smaller size of UCITS funds means that it will not be suitable for all hedge fund investors. These concerns may need to be addressed in order to convince the majority of the hedge fund universe of the benefits of UCITS hedge fund structures.”
To read the full report, please visit: www.preqin.com/docs/reports/UCITS_Hedge_Funds_Report_June_2013.pdf