•  
• Tweet
•  
•        Print
•  
•         Track Keywords
•  
• 

By Beverly Chandler, Opalesque London:

The European Fund and Asset Management Association (Efama) has turned its attention to the rise of Newcits, the edgier cousin of Ucits, often linked with alternative investment strategies.

When the Undertakings for Collective Investments in Transferable Securities were first introduced in 1985, no one would have predicted that this plain vanilla route to cross border marketing of pooled investment funds would evolve into such a diverse and popular sector. According to the Efama report there is a wide disagreement on the size of the Newcits business. Consultants Strategic Insight reported in 2010 that the universe of Newcits is composed of around 1,000 funds with assets of €114 billion. Other providers, such as the Absolute UCITS database (Hedge Fund Intelligence), were counting at the end of June 2010 more than 600 Newcits funds and only €34 billion of assets.

The problem of accounting for them probably stems in part from the more fundamental problem of defining them. The Efama report gives three definitions for Newcits. For some, the report says, "Newcits are simply UCITS that take advantage of certain investment techniques permitted by the UCITS III Directive, which enables UCITS to pursue strategies that were previously more common in the alternative investment fund sector – in particular, the hedge fund sector."

Efama believes that the investment performance objectives of Newcits are not usually driven b......................

To view our full article Click here