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Oliver Prock From Kirsten Bischoff, Opalesque New York:

As the Opalesque Roundtables make their way through Europe, one of the most talked about trends within the industry is the rise of the UCITS fund as an asset raising vehicle for managers and a safety line for investors. However, as much as managers believe these funds offer a much-needed (yet very specific exposure to some investor groups), there has been some level of caution expressed that the enormous asset growth in these funds and a level of investor misunderstanding of what they promise could present future problems. This includes the increasingly advanced "financial engineering" that occurs in order to make some hedge fund strategies UCITS friendly.

Salus Alpha Capital, which has $1bn in assets across 13 strategies, launched its first UCITS fund in 2003, said firm CEO and CIO Oliver Prock during the latest Opalesque Austria Roundtable. "UCITS was for us really an easy decision in 2003, given all the advantages around distribution. We started with UCITS I and then converted to UCITS III. Structuring a fund in UCITS IV is not different," he explains. Prock further believes that UCITS will drive some of the change within the industry as hedge funds and mutual funds move closer together. "Convergence is going on. Mutual fund companies will go towards hedge fund mainstream strategies and the mainstream hedge fund managers will go towards UC......................

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