Merchant Capital to launch Ucits platform for hedge fund managers
Merchant Capital is to launch a Ucits III umbrella structure that will provide hedge fund managers, including small to mid-sized firms, with a cost-effective vehicle for running their own Ucits III funds.
Historically, it has taken between three and six months to construct and bring to market a Ucits product.
Funds using Merchant Capital will take approximately four to six weeks, while also significantly reducing the high fees the process normally incurs and fulfilling all necessary counterparty requirements.
Tressis, a Spanish distributor of investment funds, structured products, fixed income and other financial products, has selected Merchant Capital as its Ucits III umbrella provider. The company is due to launch a European equity long/short strategy on the platform.
José Miguel Maté (pictured), chief executive of Tressis, says: “Merchant Capital was selected on the basis of being able to deliver exactly what was required for Tressis’s first venture into Ucits funds, including meeting a tight deadline for launch.”
Hedge fund managers using Merchant Capital will not be required to pay a standard minimum entry fee and will also benefit from significantly reduced legal and administrative costs. The Ucits III umbrella structure will also allow the manager the freedom to seek competitive swap rates in the marketplace and take advantage of competitively-priced agreements in place with some of the market's leading providers.
Additionally, the company will enable investors and managers to reduce the counterparty exposure inherent in partnering with a single institution.
Merchant Capital will supply hedge fund managers with all the controls and systems required to manage a Ucits III fund. As well as risk management and middle office support, Merchant Capital also provides company management, regulatory infrastructure and compliance oversight.
An independent board of trustees is to be provided, along with an independent administrator, custodian, accountant and oversight of all legal documents. Merchant Capital, however, does not at this point supply feeder capital like an incubation platform.
George Cadbury, director of Merchant Capital, says: “Merchant Capital has created a solution to the many problems faced by managers in trying to access the Ucits market. Many traditional investors from all over the world are now indicating a preference to invest in a Ucits structure, but unless you are a multi-billion dollar fund the barriers to entry are high.”
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