Investors continue to flock to UCITS III-compliant hedge funds, according to a new report.
Research firm Strategic Insight said that UCITS hedge funds have attracted almost US$200 billion—about one-tenth of the roughly US$2 trillion managed by hedge funds worldwide. And the 1,000 UCITS funds aren’t only taking in money from Europe, but from Asia, Latin America and the U.S.
“The search for better performance and diversification is encouraging innovation in the fund industry, and leading to alternative products that were unimaginable in a retail context just a decade ago,” Jag Alexeyev, Strategic Insight’s head of global research, said.
The biggest beneficiaries of those inflows, however, are not hedge fund firms—many of which have rushed UCITS products to the market in recent months. Instead, traditional asset managers have stolen a march in the alternative UCITS arena.
“Most of the bigger products are managed by well-known fund companies with a long-only tradition, and only a few represent offerings by alternative fund managers,” Alexeyev said.
Indeed, Strategic Insight estimates that hedge fund firms manage less than US$50 billion of the US$200 billion attracted by UCITS hedge funds. Most of the UCITS funds launched by well-known hedge fund firms have failed to attract even US$100 million, the firm said.