Industry Updates

UCITS III hedge fund offerings proliferate as new industry model gains traction – HFR

Wednesday, February 10, 2010

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Opalesque Industry Update - More than 200 hedge fund offerings now comply with UCITSIII guidelines, reflecting the continued evolution of the industry to meet institutional investor standards, according to Hedge Fund Research Inc., the leading provider of data and analysis of the hedge fund industry. The number has grown rapidly in the last 18-24 months, before which time few hedge funds offered UCITS III products to investors. Total hedge fund assets under management in UCITS III-compliant funds now exceed £35billion, a figure that is likely to continue to grow in the near future.

Undertakings for Collective Investment in Transferable Securities, or UCITS, are a set of European Union (EU) directives that allow investment funds to distribute throughout the EU on the basis of a single authorization from one member state; UCITS III is the latest iteration of these directives. Despite the focus on EU investors, UCITS III compliant offering are not limited to EU-located or domiciled hedge fund firms; in fact, firms across all regions have created investment vehicles which are complaint with the UCITS III standards. In some cases firms are receiving UCITS III approval for existing vehicles, while in other cases firms are launching new products which conform to the UCITS III guidance.

“ As the structural requirements of institutional investors continue to shape the landscape of the industry, funds conforming to UCITS III guidance have generated a significant amount of interest” said Ken Heinz, President of Hedge Fund Research, Inc. “UCITS III constitutes a compelling and tractable set of guidelines which serve to greatly enhance product transparency, cross-border distribution, and risk control, while at the same time providing an attractive alternative to other regulatory proposals under consideration by various financial regulatory authorities globally.” Corporate website: Source

- FG

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