Tue, May 22, 2018
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Opalesque UCITS intelligence

Editorial

Wednesday, July 24, 2013

Sophie

In its latest report, the hedge fund research firm PREQIN had some interesting research on Alternative UCITS (the report is freely available). Highlights included:

  • 86% of investors in UCITS hedge funds are based in Europe
  • Long/Short equity has been the most commonly sought UCITS by investors in the last 12 months
  • Half of the UCITS hedge fund pursues a Long/Short strategy
  • 12% of UCITS funds are managed by US based fund managers
  • UCITS hedge funds returned 2.46% in Q1 2013 compared to 3.22% for hedge funds

First, I would like to outline the difficulty to analyze the funds and strategies universes which combine hedge fund managers and long only firms. Is the biggest fund under that category ( ie Standard Life Global Absolute Return Strategies Fund)– suitable under Alternative UCITS? With $25 billion under management is its weight appropriate ?

It makes sense to divide Alternative UCITS in two universes: Hedge funds and long only in order to identify the style of management and compare funds that are using similar investment guidelines.

Some allocators such as Daniel Capocci, CIO at Archidas selecting UCITS, explains that combining the brand of long only managers with specific Long/Short skills in hedge fund managers gives a good mix to investors, especially retail investors.

Yes indeed, Long/Short equity strategy is the strategy that probably fits the best under a UCITS format. We have addressed this issue in our interview with event driven managers.

Most asset allocators and investors recognize that the pool of talent is mainly European. See PSAM’s comment in this edition on their experience in bringing their US expertise under a UCITS format.

Finally, the levels of returns are still a critical aspect of UCITS funds at a time where retail and institutional investors are looking for yields! However, investors in general are aware that liquidity and regulation are limiting their investment processes and therefore their upside in performance. I remain extremely prudent on the level of communication to investors on strategies such as Risk Parity, especially when the performance volatility, ; as experienced in May and June, could have a negative impact on the UCITS brand.

When Matthias and I were at the GAIM Conference, we met several investors and asset allocators who were pleased to read more about the UCITS platforms and their models. Consequently, we have decided to provide even more insight on this specific universe and we will continue to follow in our coming editions.

We wish you a happy reading and are look forward to hearing your feedback !
Have a lovely summer !

Sophie
sophie@opalesque.com



 
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. News Briefs - Warren Buffett: Target date funds aren't the way to go, Cambridge Analytica could be reborn under a different name[more]

    Warren Buffett: Target date funds aren't the way to go Planning for retirement can be complicated and stressful. This is why target date funds - funds that are managed based on when you expect to retire - are so attractive. Over time, the balance of stocks, bonds and cash evolve automati

  2. Investing - Hedge funds hike Smurfit Kappa positions amid takeover deal hopes, Hedge fund IBV Capital digs deep to unlock long-term value in a competitive market, Eisman of 'The Big Short' fame recommends shorting Deutsche Bank[more]

    Hedge funds hike Smurfit Kappa positions amid takeover deal hopes From Irishtimes.com: Two US hedge funds, Davidson Kempner and York Capital, have accumulated a combined 4.74 per cent interest in cardboard box maker Smurfit Kappa using financial derivatives. It comes as many investors cl

  3. Foundations of hedge fund managers gave big to controversial donor-advised funds[more]

    In the world of philanthropy and tax-deductible charitable giving, the explosion of donor-advised funds has touched off intense debate. Now, there is evidence that the DAF boom is being further fuelled by hedge fund foundation money. Four of the top five foundations that gave the most to large do

  4. Study: For hedge funds, smaller is better[more]

    From Institutionalinvestor.com: The smaller the hedge fund is, the better its performance is likely to be, according to a new study. The study - "Size, Age, and the Performance Life Cycle of Hedge Funds," released April 26 - sought to determine whether a hedge fund's size and age had any effect on i

  5. Hedge fund returns rose in April for first gain since January[more]

    From Bloomberg.com: Bloomberg Hedge Fund Database shows returns flat this year - Currency strategies had the biggest monthly gain at 13% Hedge fund returns increased 0.78 percent in April, reversing two consecutive monthly declines. The swing of 134 basis points was driven by gains in all seven