Gestion alternative UCITS III

By Olivier Sciales (pictured) and Rémi Chevalier – Continued uncertainty regarding the provisions of the European Union’s Alternative Investment Fund Managers Directive, despite its formal finalisation on June 8, remains an important growth driver for the growth of Ucits funds offering alternative strategies. With the drafting of Level 2 measures to implement the directive in detail still months away at best, the lack of clarity is strengthening the appeal of Ucits to institutions as regulated vehicles.

An increasing number of alternative managers are rolling out Ucits-compliant funds to complement their offshore offerings. They provide a clear, transparent way not only to attract investors across Europe through the regime’s passporting feature, but thanks to their recognition among global regulators managers can capitalise on the popularity of Ucits in regions such as East Asia, Latin America and the Middle East.

By James Williams – The last twelve months have done a lot to consolidate peoples’ views of alternative Ucits. Fund managers have started to wake up to the obvious benefits of having an onshore vehicle and the value that the Ucits structure can bring.

Every month new funds are being launched, transforming a sector that was once the preserve of equity l/s strategies into one populated by more diverse, complex strategies including event-driven, global macro, credit and CTAs. The emergence of John Paulson, Barton Biggs of Traxis Partners and York Capital illustrates the depth of hedge fund talent embracing Ucits

By James Williams – The alternatives industry is today experiencing a paradigm shift. Long the preserve of ultra wealthy individuals and family offices, hedge funds are undergoing a cloning exercise, with managers offering onshore vehicles to appeal to a wider investor base.

There are now in excess of 400 alternative Ucits and the universe keeps on growing, with recent surveys indicating that over 100 hedge fund managers are considering launching Ucits products.
“The growth rate in alternative Ucits is going to remain substantial for at least the next two or three years. That for me is very clear,” says Eric Bertrand (pictured), Director of Schroder GAIA, the firm’s Ucits platform.

Funds of Ucits hedge funds are a recent product development: the Gottex Absolute Return Fund, a multi-strategy product, launched 7 July 2010. As such, few have had the chance to produce eye-popping returns because in the time they’ve existed, the markets have been sluggish. “I think when equity markets improve you’ll find returns starting to pick up and investor interest will grow,” says Chris Hawkins, Managing Director and Portfolio Manager of Gottex Absolute Return (Ucits) Funds.

Alternative Ucits funds are easily understood, regulated, and transparent. Consequently, some investors are allocating directly to managers rather than paying a FoFs adviser to construct portfolios. Such investor complacency creeping into the market is due, in part, to the lure of regular liquidity and the imprimatur that comes with what is viewed by some as a government-approved product.

Hedgeweek Special Report Alternative Ucits 2011 (pdf File)