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Sophie

NEW HOPES ?

After almost two years of low returns and a difficult macro environment, several surveys among investors and fund managers show new hopes for alternative investments and for Alternative UCITS.

We believe that investors are more mature in their expectations in terms of risk and return. They recognized that UCITS offer transparency and liquidity with low leverage, all elements that have a cost on performance.

Some strategies have always fitted into the UCITS format, while others have not.

Since 2010, fund managers have suffered from the total irrationality of the markets and the alternative risk on/risk off environment has certainly been one of the main challenges in keeping steady positive returns.

Alternative UCITS platforms are also an alternative to the fund of funds model, which is still under stress.

Factors for hope:

• Less crowded universe of funds
• Better performance
• Longer track records
• Additional talented managers

Stress factors:

• Average performances in 2013
• Low inflows
• AIFs Funds as an alternative to Alternative UCITS
• Additional regulatory constraints for fund managers

Private Banks (advisory and discretionary), fund of funds, asset managers, family offices, insurance/pension are invested in UCITS platforms, each of them matching different investment requirements in terms of liquidity, transparency, tax and capital efficiency.

Several investors met recently recognized that the universe of funds is larger, attracting talented managers, especially US key hedge funds.

Happy reading and looking forward to receiving your feedback !

Sophie
sophie@opalesque.com