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Benedicte Gravrand, Opalesque London:
Now that there is greater focus on risk management, due diligence and liquidity within the hedge fund industry, following the liquidations and redemptions in 2008-09, and that new regulations are looming, the European "passport" structure UCITS has taken off.
This is partly because more European investors are seeking onshore, or more liquid, or more transparent regulated funds, and partly because UCITS funds are not expected to be regulated by the EU under the AIFM Directive, to be voted this year. UCITS stands for "Undertakings for Collective Investments in Transferable Securities."
Back-to-back inflows into UCITS funds in Q2-09 were estimated at €30bn. Total assets are estimated at €4.8tln. Regulators and industry bodies have predicted that it will be €8tln by 2012. They also speculated that more hedge funds will split strategies towards UCITS, and illiquid strategies towards private equity style vehicles.
The European Fund and Asset Management Association, for example, found that long-term UCITS funds had attracted €19bn ($27.4bn) in assets in November, marking it the eighth consecutive month of gains.
A source told Opalesque that there are currently approximately 300 UCITS hedge funds around - and the number is growing each week. Since the beginning of the...................... To view our full article Click here
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