UCITS hedge funds: boom time?

Tue Sep 21, 2010

In 2007, before the sub-prime mortgage market in the US triggered the global financial crisis, the world-wide recession and financial indices and interest rates around the world dropped to historical lows, there were very few hedge fund managers offering their funds wrapped up in UCITS.

The debt and leverage fueled years after the dot-com bubble burst, saw the global hedge funds industry grow from $450 billion in 2000 and peaking at $2.7 trillion in mid-2008.

Jeremy Soutter

The collapse of Lehman Brothers, the Bernie Madoff scandal, fund blow-ups, poor performance of some hedge funds and the widespread – if false – perception that shorting could bring companies, especially banks, and countries to their knees followed this poignant crescendo in 2008. These factors, and other tremors, resulted in greater global regulatory scrutiny of the sector and resulted in a growing appetite of UCITS hedge funds that have the added bonus of transparency and liquidity and aim to achieve alpha in an era of low interest rates.

Edgar Senior, global head of capital services for Credit Suisse, says in the last six months he has seen a dramatic increase in the number of funds being launched in the hedge...

ISSN: 2151-1845 / CDC10004H

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