UCITS hedge funds: German investors find a way to access offshore hedge funds strategies
Thu Mar 3, 2011
Investing in absolute return products has been increasing in Germany over the past few years. Joy Dunbar, editor of Absolute UCITS, investigates why more Germans are investing in UCITS hedge funds.
German investors are traditionally perceived to prefer
'safer' investments like bonds and to shun volatile
In the last decade the world has experienced two of the worst
ever stock market crashes, and the safe havens of government
bonds have also been undermined by the threats of the Irish and
Greek governments defaulting on their loans which has created
greater economic uncertainty.
However, restrictions imposed by the German local financial
regulator, BaFin, mean that investors have found it challenging
to invest in offshore hedge funds.
Changing European legislation means that certain hedge fund
strategies that were traditionally only available to offshore
investors are now available to retail and institutional German
investors via the UCITS wrapper.
This has created opportunities for the absolute return or
UCITS hedge industry in Germany and is demonstrated by both the
increased number of absolute return funds available to
investors and by their assets under management....
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