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From Kirsten Bischoff, Opalesque New York:

The rapidly expanding popularity of UCITS fund structures seems to be taking even those entrenched in the hedge fund industry by surprise. With UCITS representing $35bn in invested assets and with an astounding 200 new UCITS funds launching over the past 18-24 months (HFR), many expect the enormous rate of growth to continue as more cash leaves the sidelines. (Opalesque has carried news of 6 launch announcements in the past week alone.) "Many of the fund of hedge funds we are talking to are also widely considering UCITS as a potential instrument to regain assets from private banking clients and high net worth individuals who have not returned to alternative investments yet," says the management team at London-based investment firm KdK Asset Management in a report the firm released on Monday.

Seeking to determine the scope of investors' knowledge and opinion of UCITS vehicles, the firm surveyed 59 respondents from all around the globe and found out the growth UCITS funds have enjoyed over the past months may only be the tip of the proverbial iceberg.

"Despite the fact that the fund of hedge fund providers generally expected UCITS hedge funds to underperform their equivalent offshore funds, and that they consider the current investment UCITS hedge fund universe as being too narrow, the fund of UCITS appeared to be the preferred way to structure such offering......................

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