Harnessing the convergence between traditional and alternative investments

Mon Dec 5, 2011


The revival of SEC fund registration is slow but remains popular with big banks and large FoHF brands wanting to deepen distribution and go retail


By Niki Natarajan

The growth of funds of hedge funds registered with the SEC under the 1940 Act in the US has been very slow in taking off, and the much anticipated revival is only now starting to gather a modicum of momentum. Despite this, there are a number of reasons why the time for a regulated and transparent wrapper is finally coming. Perhaps the most important one is the convergence of alternative and traditional investments, and the registered investment company in the US and the UCITS structures in Europe are allowing this to happen.

For this reason, the players are likely to be the bigger asset managers and banks all looking to raise assets and capitalise on traditional mutual fund distribution channels.

On the single-manager side, the transition into what are called 'alternative' mutual funds has already started. According to SEI's 2009 white paper called "Exotic to Mainstream", in...

ISSN: 2151-1845 / CDC10004H

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