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Money managers under the microscope

Onshoring the hedge fund industry

October 2, 2009

Hedge fund executives are increasingly talking about the “onshoring” of the industry — new funds being domiciled in Luxembourg rather than Cayman, their traditional home — and our story today about RCM shows more and more are putting it into practice.

rtxdixpThe firm, which has less than $200 mln in hedge fund assets, hopes to raise at least $100 mln with two new funds, including a Luxembourg-domiciled Ucits equity fund.

Clients, it said, including family offices and private wealth managers, were happier with a Luxembourg Ucits than a Cayman hedge fund.

Last month it was announced that Man Group and Cheyne Capital are launching Ucits funds.

Ucits funds are more flexible than traditional long-only funds but don’t give a manager all the tools that a Cayman hedge fund (where Ucits doesn’t extend to) would.

Nevertheless, for strategies such as long-short equity they can offer managers enough flexibility whilst giving investors access to funds they see as being more transparent.

Supporters of the EU’s controversial draft directive are hoping more and more hedge funds will come onshore, but perhaps the industry is already doing that for them.

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