Funds of funds struggle to take off

Fri Dec 2, 2011

Multi-manager UCITS funds have not yet captivated investors

Michael Warren 
Thames River 
A more tangible by-product of the combined limitations on the UCITS hedge fund space has been the disappointingly subdued activity in the market for UCITS-compliant funds of funds.

A year or so ago, the general consensus among managers appeared to be that the prospects for the funds of funds (FoHFs) market were bright. As Thames River commented in a newsletter published last November, "taking into account the variety of investment and trading styles [eg. systematic, discretionary, shorter-term, longer-term], the universe now exhibits sufficient depth to allow the construction of appealing and robust multi-manager portfolios".

On the surface, the figures tracking the growth of this part of the UCITS market look reasonable enough. The number of UCITS funds of hedge funds rose by 148% in 2010 – from 23 to 57 – with assets under management increasing by almost 200% to €2.6 billion.

That, however, remains...

ISSN: 2151-1845 / CDC10004H

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