Funds Hub

Money managers under the microscope

Reuters reporters head for the engine room

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Reuters will be holding a European funds summit in Luxembourg this week, piggy-backing on the ALFI spring conference. It’s a useful opportunity to take stock of a startling couple of years for the industry, as well as looking ahead to the shape of the sector for the years to come.

We’ll be speaking to a host of senior industry players from both sides of the fence, from the top performing fund managers to the people that make the industry tick; Luxembourg got a jump on the rest of the fund market by being the first to leap on the UCITS train back in 1988 and now houses much of the sector’s administrative machinery as it becomes truly cross-border.

There will be a focus on trust, and we’ll be trying to get to the bottom of fund firm plans to win back clients who were burned during the credit crisis while keeping their fees and margins as intact as possible. Luxembourg was also the venue for the latest attempt by investors to gain restitution after losing money in Bernard Madoff’s Ponzi scheme, and the summit gives us a chance to press regulators on what they will do offer protection to those caught in future scams.

There’s also an intriguing debate to be had over the future of the UCITS fund model itself. Hedge funds are helping to raise some eyebrows as they move to bring their products to the retail market (and charge more to do it), and some in the fund industry are calling for a twin-track regulatory structure which offers retail investors a guaranteed venue where their innocent eyes are shielded from the bright lights of shorting and derivatives allowed by UCITS’ latest incarnations.

Morning line-up: Terminator, takeovers, Ucits

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News and views on the hedge fund sector from Reuters and elsewhere:

RTR1SGF8 U.S. judge OKs ‘Terminator’ sale to hedge fund – Reuters Should hedge funds be disenfranchised? – BBC Blog Ucits-compliant hedge funds growing – Hedge Funds Review How to invest $100 mln in 2010 – Seeking Alpha

Apples, pears and Ucits

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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.

Morning line-up

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News and views on the hedge fund sector from Reuters and elsewhere:

tea.jpgEx-Centaurus HK chief starts new fund - Bloomberg

Reprieve for Cohen? – Reuters

Hedgies’ impact on energy trading – Commodities Now

Investors pour in billions – Reuters

Citi taps the UCITS rush – FINAlternatives

Pension funds warn of €1.5 bln regulation cost

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As the debate over the EU’s controversial and highly-politicized AIFM proposals on hedge funds and private equity rumbles on, there emerges more evidence that boosts opponents of the plans.

RTR28O54An article in Global Pensions highlights a letter to the European Parliament’s Committee on Economic and Monetary Affairs from Dutch pension funds and asset managers, saying the implementation of the AIFM in its current form could cost 1.5 bln euros annually.

Onshoring the hedge fund industry

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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.

The use of UCITS

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Hedge funds are continuing to react to potentially seismic shifts in regulation.

rtr27xy2A number of firms, notably Man Group and Cheyne, are debuting onshore funds that will use the ucits structure — not only widening the potential pool of investors but also sidestepping the EU’s new draft directive on non-ucits funds and the surrounding uncertainty as the draft is debated.

Today Veritas said it is launching a long/short China ucits fund for top fund manager Ezra Sun, targeting an annual return of 15-20 percent.

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