U.S. and Asian Managers Expected to Launch More UCITS and AIF Funds

Oct 7 2016 | 11:35pm ET

Institutional investors expect U.S. and Asian fund managers to launch more alternative investment funds through UCITS and AIF frameworks in Europe over the next two years, according to a new study by Aquila Capital.

More than three-quarters of the investors surveyed think the number of such funds will increase, Aquila said, driven by a growing appetite among U.S. and Asian managers to access new pools of European investor capital.

Aquila’s research involved 112 institutional investors across Europe, and was done in July 2016, according to the company.

More than half (53%) believe that interest is growing as a result of regulatory constraints preventing European investors from investing in offshore hedge fund strategies, and a third believe it is coming from a greater understanding among overseas managers of the UCITS framework.

Aquila’s survey also revealed that more than three-quarters of the investors surveyed expect the use of third party platforms by U.S. and Asian asset managers launching UCITS/AIF compliant funds to increase. Of these, 72% think managers would prefer to partner with a European asset management platform as opposed to just 4% who think they would choose a European investment bank. 

Investors rated the key advantages to overseas managers of partnering with a third party platform as offering immediate access to a capital base (49%); providing greater speed to market (46%); access to a distribution network (38%); and compliance and corporate governance responsibility (35%).

According to the study, four in 10 European investors think the U.K.’s recent vote to leave the EU is likely to further strengthen Luxemburg’s position in the alternative investment sector and as a UCITS jurisdiction.

“This study underlines the growing interest of U.S. and Asian managers for accessing and successfully launching vehicles that seek to raise capital in Europe,” said Manfred Schraepler, head of financial assets and liquid private markets at Aquila Capital, in a statement. 

Founded in 2001, Aquila Capital is worldwide provider of alternative investment solutions for institutional investors. The firm specializes in quantitative investment strategies, long-short-equity strategies, and private market investments as well as real asset investments in farming, timber, infrastructure and real estate, and manages approximately €7.1 billion.

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