Ucits hedge funds gain traction

Ucits-compliant hedge funds are here to stay and the universe will expand rapidly, according to a panel of investors. Albourne Partners Deutschland senior analyst Bernhard Steege said the consultancy had identified 265 single-manager hedge funds operating within a Ucits wrapper with assets under management of around $50 billion. He was speaking at a forum on Ucits organised by Deutsche Bank, Steege said he thought there would be up to 400 such funds on the market within the next six months.

Deutsche Bank Private Wealth Management's global head of hedge fund investments Pascal Botteron disagreed. He said he belived there could be as many as 1,000 Ucits hedge funds active within "a year or two".

The panel agreed Ucits-compliant hedge funds were not going to vanish. Steege described the trend for launches as a "game-changer".

Michele Gesaudi, portfolio manager at Italian fund of funds manager Kairos Investment Management, said a Ucits fund could be attractive to a different type of institutional investor unable to allocate directy to offshore or unregulated funds. Such investors include German and Austrian institutional investors as well as Italian insurance companies, for example.

The panel warned the more tightly regulated Ucits regime did not necessarily mean lower risk. Botteron and Steege said investors still needed to do detailed due diligence before putting money into a Ucits-compliant hedge fund.

-Hedge Funds Review