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Opalesque UCITS intelligence

News round up: News selection from Alternative Briefing on UCITS

Wednesday, July 24, 2013

NEWS SELECTION FROM ALTERNATIVE BRIEFING ON UCITS – JUNE AND EARLY JULY 2013

MANAGERS

Alternative strategies that are normally used by hedge funds and private equity are increasingly being packaged as mutual funds in the U.S. and as UCITS in Europe. Blackstone, one of the world's leading investment and advisory firms, is jumping on that bandwagon.

Blackstone Alternative Asset Management (BAAM), Blackstone's hedge fund solutions business, is set to launch its first alternative investment-focused mutual fund that offers daily liquidity. BAAM is the world's largest discretionary allocator to hedge funds and has around $49bn under management.

Bernheim, Dreyfus & Co., an asset manager based in Paris that runs absolute return strategy funds and managed accounts, has just launched a global macro UCITS IVcompliant fund called Carmel Global Opportunities. This new fund invests in multiple asset classes across the OECD universe, and aims to deliver steady long-term capital appreciation through diversification of investment style, alpha source and time horizon.

SunTx Capital partnered with Ron Dodson to launch IXTHYS Capital; former Mizuho trader Jeffrey Yap was reported to be launching a multi-strategy credit strategy; Valuewalk said CQS would launch a long/short equity hedge fund; and Spartan Fund has launched a discretionary fund onTREND.

Former JPMorgan trader Deepak Gulati raised about $300m in assets for his new hedge fund Argentiere Capital, said Bloomberg; and Goldman Sachs' ‘hedge fund for the masses' raised $58m in first month.

Investec announced it was launching a UCITS-compliant version of John Stopford's multi-asset fund; and Stockholm, Sweden-based RPM Risk & Portfolio Management launched the RPM Evolving CTA Fund targeting new and growing CTAs as Luxembourg-domiciled fund (SICAV).

Man Group teams with Nomura for fixed income fund to launch an Alternative UCITS fixed income fund designed to take advantage of the current low interest rate environment.

 

REGULATION

The Luxembourg Parlement adopted bill 6471 on alternative investment fund managers and transposing the AIFMD into Luxembourg law in its first constinutional vote on 10 July 2013. See Dechert latest excellent summary paper.

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In the second part of its two-part white paper on the AIFMD's compliance requirements, the author Shane Brett looks at further obligations and opportunities the Directive implies, including fund domiciliation, manager liability, reporting requirements, managing illiquid investments and the AIFMD Passport. You can download his excellent white paper : AIFMD-what should you be doing to comply ? in Opalesque Briefing 10th of July.

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European Parliament lawmakers will delay voting on rules to curb fund manager bonuses as they continue to tussle over details of the plans.

 

MARKET TRENDS & SURVEYS

To what extent have UCITS become a new home for most hedge funds? Participants note during the recent Opalesque UK Roundtable that even though the UCITS fund structure is becoming a lot more popular among investors and is set for further growth, it will not likely replace the offshore fund structure. Liquidity considerations, tactical opportunities, and individual investors' needs will greatly participate in the growth of the UCITS universe.

A new trend among institutional investors is a move towards pan-alternatives portfolios, participants noted during the recent Opalesque UK Roundtable. Such portfolios do not only allocate to hedge funds or private equity. There is another trend in that investors used to investing in single managers funds are now looking to invest in funds of funds. It was further noted that institutional investors are becoming much more active and also more regulation-savvy.

According to Andrew McCaffery, Global Head of Hedge Funds at Aberdeen Asset Management, a $320bn asset manager, many institutional investors are moving towards panalternatives needs and portfolios. Such portfolios do not merely include hedge funds and private equity, "but a whole range of things they want to consider in their alternative allocations and how to blend them for their portfolio objectives."

The market opportunity for retail alternatives is already huge, continues to grow, yet is still in its infancy, says SEI in a new 24-page report called "The Retail Alternatives Phenomenon.”

Indeed, alternative strategies that are normally used by hedge funds and private equity are increasingly being packaged as mutual funds in the U.S. and as UCITS in Europe. This is what the report calls "retail alternatives.”

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Investment software provider Multifonds has published its white paper, entitled: The impact of AIFMD and convergence survey. Key findings from the survey include:

  • 83% of respondents agree convergence of traditional and alternative funds will continue
  • 64% of respondents view depositary liability as the most challenging aspect of AIFMD
  • 59% of respondents believe that AIFMD will become an international standard for distributing AIFs globally, similar to the UCITS brand
  • Luxembourg and Ireland are likely to be the most successful onshore EU domiciles under AIFMD for attracting new business or funds re-domiciling
  • 70% of respondents agree that non-EU managers will set up European operations to take advantage of AIFMD
  • 77% of respondents think that EU managers may choose to set up offshore structures to avoid AIFMD costs
  • 52% of respondents have seen a rise in the costs of implementing AIFMD since the release of the Level 2 text
  • Depositary costs continue to be a concern, with 41% of respondents expecting depositary costs in the region of 5–25bps
  • 77% of respondents agree that sub-custodians will be subjected to increased due diligence
ML capital published mid July its latest Barometer. John Lowry, Founder & Co-CEO of ML Capital commented:

"Change is the main theme this quarter. There is major upheaval facing the alternative investment industry at present, as it prepares to address key regulatory initiatives including FATCA and the AIFMD. Against this complex regulatory backdrop, the results of the latest barometer confirm the feeling that we are at a potentially major inflection point with regards to investor sentiment and behaviour. Whilst the next few months should tell which direction the world is going – our results confirm that we may already be at a major point of change. While investors are very bullish on the outlook for the US Long/Short and Global Macro sectors, sentiment has turned negative towards two of the previously most popular strategies over the past three years – Emerging markets equity and Government bond funds.”

Opalesque media kit gives you access to the top news round up in UCITS ; the recent region roundtables in the UK, France and Germany provide excellent feedback from market players on the overall critical issues such as regulation, market trends and investors' demand. Don't miss reading our content to be updated on the most important issues of our sector.



 
This article was published in Opalesque UCITS intelligence.
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