GLOBAL - The totality of the respondents to this month's GP 100 panel said they are neither investing nor considering investing in UCITS-compliant hedge funds.
The results come after recent research by Preqin suggested fewer than one in 10 institutional investors have invested in UCITS-compliant hedge funds, but 35% of those surveyed could within 12 months.
Respondents to Preqin’s survey listed four factors as the value added of UCITS: transparency (41%), regulatory oversight (22%), liquidity (22%), and a strong risk management framework (11%).
The firm surveyed 50 investors from Europe and North America at the end of 2009, including public and private pension funds, other institutional investors and asset managers.
In addition, it held interviews with 60 fund managers from 13 countries. Over one-fourth (28%) of managers surveyed are currently running a UCITS platform and a further 28% are presently adopting UCITS style in their hedge fund portfolio.
Just over half of European-based managers currently offer UCITS products, constituting the largest source of UCITS funds.
Nicole Rubbi-Clarke, editor of the Preqin report, said: “The UCITS trend has been the strongest in Europe, however, features such as transparency, liquidity and backing by solid regulation are attracting investors worldwide to UCITS vehicles; we predict the UCITS universe will continue to expand particularly as investors remain cautious and calls for increased regulation of the industry continue.”
She added: “Growing numbers of managers, predominantly the larger and more established managers, are accommodating investor demands by offering UCITS products. UCITS offers solutions to mitigating risks, but it also has some drawbacks such as higher structural costs and investment restrictions.”
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