UCITS Hedge Fund Offerings Proliferate
Friday, February 12, 2010
More than 200 hedge fund offerings now comply with the European Union's (EU's) UCITS III guidelines, reflecting the continued evolution of the industry to meet institutional investor standards, according to Hedge Fund Research Inc (HFR).
According to HFR, this number has grown rapidly in the last 18-24 months, before
which time few hedge funds offered UCITS III products to investors. Total hedge
fund assets under management in UCITS III-compliant funds now exceed USD35bn,
a figure that is likely to continue to grow in the near future.
Undertakings for Collective Investment in Transferable Securities, or UCITS,
are 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 complaint 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 guidance.
“As the structural requirements of institutional investors continue
to shape the landscape of the industry, funds conforming to UCITS III guidance
have generated a significant amount of interest,” said Ken Heinz, President
of Hedge Fund Research, Inc.
“UCITS III constitutes a compelling and tractable set of guidelines
which serve to greatly enhance product transparency, cross-border distribution,
and risk control, while at the same time providing an attractive alternative
to other regulatory proposals under
consideration by various financial authorities globally," Heinz observed.
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