UCITS Funds All The Rage
Monday, February 14, 2011
Investors are expected to allocate more than USD185bn to UCITS III funds over
the next year, another sign of the growing popularity of this class of 'onshore' hedge
fund.
According to a survey by Deutsche Bank of 184 investment entities, including
wealth managers, family offices, insurers and high-net-worth individuals, among
others, the size of the sector is expected to more than double over the
next year, assuming a current level of USD140bn in assets under management in
these funds.
“The outlook for the UCITS III absolute return industry is bullish,”
said Daniel Caplan, European head of global prime finance sales and alternative
UCITS distribution. “The survey results confirm our experience that these
products are appealing to investors, especially the larger institutional players.
If the existing funds perform and we continue to see high quality product launches,
then inflows could double in the next twelve months.”
Undertakings for Collective Investment in Transferable Securities, or UCITS,
are formed under a set of EU directives that allow investment funds to distribute throughout
the EU on the basis of a single authorization from one member state; UCITS III
is the latest iteration of these directives.
Despite the focus on EU investors, UCITS III compliant offering are not limited
to EU-located or domiciled hedge fund firms; in fact, firms across all regions
have created investment vehicles which are compliant with the UCITS III standards.
In some cases, firms are receiving UCITS III approval for existing fund vehicles,
while in other cases, firms are launching new products which conform to UCITS
III guidelines.
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