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Rob Kirkwood, Head of EMEA for BlackRock’s alternative fund of funds division BlackRock Alternative Advisers, discusses the future of the listed hedge fund sector.
A fast expanding universe
As of 15 May 2008, the European listed hedge fund sector (including both single strategy and fund of funds) represented close to EUR13bn in assets under management compared to less than EUR3bn at the beginning of 2003 (Source: ABN AMRO, Alternatively, Issue 31, May 2008). What’s more, despite an exceptionally difficult capital-raising environment, new hedge fund listings have raised close to EUR2bn in capital since the start of the year (Source: Cazenove, Listed Hedge Funds Dispatch, June 2008). There are several good reasons why the market for listed products has grown significantly in the last few years.
Attractive structural features
We believe listed vehicles have a number of structural features that appeal to a wide range of institutional and by extension high net worth investors in Europe. The most immediate benefit of listed vehicles is that investors can invest in structures that, barring exceptional market circumstances, offer daily liquidity. This ability to turn vehicles that have historically been open ended with relatively limited liquidity into a structure that offers a daily market and share price observable to clients is something we believe to be very attractive to many types of investors.
Furthermore, many Continental European investors are reluctan...................... To view our full article Click here
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