Funds Hub

Money managers under the microscope

Apples, pears and Ucits

February 4, 2010

Ucits funds have undoubtedly benefited from the uncertainty surrounding the AIFM directive.

A number of hedge funds have opted to launch products in the Ucits format — automatically avoiding the directive, which focuses on non-Ucits funds — rather than wait and see how the long-running political battle plays out.

Man Group and Cheyne Capital are among those to have announced plans, while start-up Nexar has said it may launch funds using this structure.

However, at a breakfast meeting at the Townhouse┬áin London’s West End today, Claude Kremer, chairman of Alfi (the Association of the Luxembourg Fund Industry), confirmed the industry is looking at a voluntary labelling of funds.

Under the scheme, which is still under discussion, Ucits would be termed either “sophisticated”, if they use instruments such as derivatives, or “simplified” if they do not.

“Investors need to understand the brand of ucits, that it’s not just a safe product and there’s no risks, because there may be risks,” said Kremer.

“The danger (of not doing it) is that investors will compare apples with pears.”

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