Sun, Mar 29, 2015
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Opalesque UCITS intelligence

UCITS Platforms

Friday, May 03, 2013

UCITS PLATFORMS

UCITS platforms were first launched in 2007, and the model is dominated by banks. The liquidity crisis in 2008 questioned the funds of funds model and its ability to offer to investors transparency on underlying assets. The investors' requirements for regulated, transparent and liquid funds triggered a strong interest in the UCITS vehicle. Today, 15 platforms are available with different business models, type of funds and distribution reach. The latest key market entrant is Goldman Sachs with three funds launched at the end of 2012.

Market Players:

Bank of America Merrill Lynch and Deutsche Bank were among the first market players to see the benefit of offering to investors a secured platform where they could find selected prestigious managers registered under the regulated and liquid structure of a UCITS. Merrill Lynch Investment Solutions managed strong growth and also experienced the exit of Bluecrest. At that time, some people questioned the business model of the UCITS platforms and its ability to secure long term relationships with managers. Since then, all platforms have shown steady growth and have enlarged their offering. The business proposal aims to select funds that have decided to access the UCITS market with the support of a secured platform and its distribution network. The business models differ in the location of the funds registered, in the liquidity provided (Canyon UCITS fund on the Lyxor platform is weekly, not daily) and the way the funds are structured. The market has grown significantly in assets and players as showed in Alix's Capital chart.

Source Alix Capital

Structure:

Winton is listed on 3 platforms (Morgan Stanley, Deutsche Bank and Lyxor) with three UCITS funds that are registered and structured under different format.

The DB fund is structured as a financial index (embedded into a swap) as the only way to get exposure to commodities UCITS. As the new ESMA rules releases in 2012 prohibit the financial index solution going forward, Lyxor decided to go down the pure physical replication route (no swaps or other financial engineering solution), which excludes commodities as imposed by regulation but seems a robust solution going forward, without deteriorating the investment proposition as evidenced by the back test.

Morgan Stanley uses a certificate-based approach whereby the UCITS sub Fund purchases certificates. These certificates are linked to interests in a trading company that references the Winton Diversified Program, which has commodities exposure.

Universe:

According to Alix Capital's quarterly reports, almost 42% of the assets of the platforms are with US managers. The platforms are judged by managers for their ability to raise assets and by investors for their capacity to attract talented managers.

Not all strategies can fit the UCITS format and naturally those platforms will in the future extend their offering to the new AIFs funds. A similar trend is currently taking place in the U.S. where a growing number of hedge funds are starting to be offered in a "40-Act" format.

The Top funds above $1 billion in 2012: Winton (DB Platform) Aquila (Alceda) York (Merrill Lynch Investment Solutions)

We have decided to present in this edition six platforms: Merrill Lynch Investment Solutions, Deutsche Bank, Alceda, Morgan Stanley, Goldman Sachs and Lyxor. We take this opportunity to thank all of them for their reactivity in sending us relevant information.



 
This article was published in Opalesque UCITS intelligence.
Opalesque UCITS intelligence
Opalesque UCITS intelligence
Opalesque UCITS intelligence
Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing


  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. Other Voices: Does the hedge fund industry benefit society?[more]

    This article was authored by Don Steinbrugge, Chairman of Agecroft Partners, a US-based global consulting and third party marketing firm for hedge funds. It is no secret that the hedge fund industry is viewed negatively by a la

  2. Private credit comes into focus for investors[more]

    Bailey McCann, Opalesque New York: As investors look for a way out of the low yield/no yield environment, private credit is becoming an increasingly attractive asset class, according to a white paper from Bayshore Capital Advisors. Private credit has grown steadily since the financial crisis as

  3. Other Voices: The role of diversification in CTA portfolios[more]

    2014 brought a resurgence of managed futures strategies, or CTAs, which performed very well as a whole, outperforming all other hedge fund strategies. However, a closer look reveals that there was a wide range of performance, or return dispersion, across managers. The bottom line? Not all CTAs

  4. Neuberger Berman unit buys 20% stake in activist hedge fund Jana Partners for $2bn[more]

    Komfie Manalo, Opalesque Asia: Neuberger Berman’s unit Dyal Capital Partners bought a 20% stake in activist hedge fund firm Jana Partners worth $2bn, WSJ.com reports. The deal comes as activi

  5. Hedge fund launches fall again, $1bn funds found to outperform even smaller hedge funds[more]

    Komfie Manalo, Opalesque Asia: The number of new hedge fund launches fell again in 2014, the third consecutive year of decline, while fund liquidations saw their first drop since 2010, according to the latest HFR Market Microstructure Industry Report released by industry data provider HFR. Acc

 

banner