Switzerland OKs First Domestic Hedge Fund

Mar 23 2011 | 12:29pm ET

Swiss authorities have approved the country's what its backers call the first domestically-regulated single-manager hedge fund, which launched earlier this month.

The Swiss Financial Market Supervisory Authority has given the go-ahead to the Swiss Hedge Trading Fund, managed by Swiss Hedge Capital. The new fund is distributed by Swiss & Global Asset Management, a division of GAM Holding, which announced the approval.

"Institutional investors, mainly from Switzerland but also from the European Union, have told us that they would prefer hedge funds that come from a more regulated environment than an offshore domicile such as the Cayman Islands," Swiss & General's Reto Barbarits told Financial News.

"One way to achieve that would be to use the European Union's UCITS fund structure, but that would not allow the physical borrowing of stock that the manager uses for short-selling," he added. "The Swiss regulations don't impose that restriction, and we wanted the manager to have the chance to do what he does exactly, so we domiciled the fund here."

The Swiss Hedge Trading Fund is based on Swiss Hedge's flagship Granada Europe Fund, which is domiciled in the Caymans. The firm plans a UCITS III-compliant version of the long/short equity strategy, with a launch probable later this year.

The new fund is available exclusively to Swiss investors.

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