Liquid UCITS hedge funds can potentially create greater systemic risks and there will be more fund closures in the sector, according to hedge funds consultant.
Dr Bernhard Steege, senior analyst and partner at consultant Albourne Partners says, that the potential liquidity mismatch is a far greater risk than if the fund underperforms or the perceived high charges.
Dr Bernhard Steege from Albourne Partners
But the future of UCITS hedge funds is great and he expects assets under management and the number of funds to grow, Steege adds.
He says: “I expect that there will be some closures and one or two funds will have issues. We are concerned about the potential liquidity mismatch as most UCITS funds have daily liquidity.