Hedge Funds Shy Away From EU Registration

Oct 14 2013 | 10:29am ET

The European Union's new UCITS-style hedge-fund registration regime isn't garnering many takers.

The new system, set up as part of the bloc's Alternative Investment Fund Managers Directive, has won only a handful of registrants. Only 11 have registered in the U.K., and only three each in Ireland and Luxembourg, major European hedge-fund domiciles, the Financial Times reports.

The framework was designed to provide a UCITS-style regime to allow hedge funds to come into compliance with the new law. But the costs and difficulty of registration has left many hedge funds, especially those based in the U.S., wary of the process, making it likely that hedge funds will continue to use private placements for as long as they can—in the U.K., until at least 2018.

"The headache and cost implications mean you have to be very confident in your ability to access funds in Europe," Akin Gump Strauss Hauer & Feld partner Ian Meade told the FT.

The experience of Marketfield, a U.S. liquid alternatives firm, helps explain the reticence.

Registering "is like major dental reconstruction," CEO Michael Shaoul told the FT. "It's not going to be pleasant. I would advise anyone going to take this step to budget considerable resources." Shaoul said he was required to substantiate his résumé and dig up his college diploma, among other difficulties.


In Depth

GSAM's Papagiannis: Liquid Alternatives For The Long Run

Apr 21 2017 | 8:44pm ET

Interest in liquid alternatives cooled a bit last year amid a broad shift in investor...

Lifestyle

Aston Martin Returns To Debt Market As DB11 Drives Turnaround

Mar 31 2017 | 5:21pm ET

James Bond’s preferred carmaker is returning to the public debt markets for the...

Guest Contributor

Debunking Conventional Investment Wisdom (Part II)

Apr 17 2017 | 5:56pm ET

The alternative investment industry is currently replete with buzzwords around data...