James Williams, news editor, Hedgeweek

UCITS inflows drop in April, Asia specialist Matthews forges new partnership with Hargreaves Lansdown, whilst CTA manager Millburn moves to daily dealing

April saw a distinct drop in UCITS net inflows according to the latest fact sheet released by the European Fund and Asset Management Association (EFAMA). Although still positive, April’s inflows of EUR18billion were in sharp contrast to the EUR47billion in net inflows for March. This was largely due to a steep reduction in net sales of long-term UCITS: EUR8billion compared to EUR32billion. Eurozone fears and market instability prompted investors to dump equity UCITS, which saw net outflows of EUR7billion. Balanced funds also recorded net outflows of EUR3billion compared to net inflows of EUR4billion in March. Net sales of bond UCITS dropped from EUR26billion in March to EUR16billion, whilst Money Market funds attracted net inflows EUR10billion: their sixth consecutive monthly gain. Commenting on April’s performance, Bernard Delbecque, Director of Economics and Research at EFAMA, said: “The decline in net sales of UCITS in April reflected, among other factors, investors’ lingering concerns about the growth and fiscal issues in the Eurozone and the relating market risks and political uncertainty.”   

According to the Irish Funds Industry Association (IFIA), the number of Irish domiciled non-UCITS funds grew 4.3 per cent in the first quarter of 2012, reported the Irish Times. The growth in Irish non-UCITS assets has been rising steadily over the last few years and currently stand at approximately EUR250billion: last month Ireland’s total fund industry AUM exceeded EUR2trillion. This 4.3 per cent increase in the number of non-UCITS funds comes at a time when the industry is preparing to implement the EU-wide legislation related to the Alternative Investment Fund Managers Directive (AIFMD). Ireland is Europe’s leading onshore market for the domiciliation of alternative investment funds.
 
Clearly, managers are starting to get more proactive and register onshore regulated vehicles (QIFs in Ireland) in order to comply with the AIFM Directive, which will allow them to take advantage of the ‘passporting’ scheme and market their funds across all 27 EU Member States. Currently, Ireland administers about 40 per cent of the world’s alternative investment funds. It has more than 1,300 QIFs, whose assets grew by 20 per cent in 2011 following an increase of 35 per cent the previous year.
 
Pat Lardner, chief executive of the IFIA, said that the Irish funds industry was “AIFMD ready” with many of the key AIFMD provisions already a standard part of the requirement for the qualifying investor fund. Added Lardner: “Being the leading service centre for alternative investment managers both within the EU and globally, Ireland has unparalleled experience in administering alternative investment funds.” It’ll be interesting to see how the number of UCITS funds being launched in Ireland compares to non-UCITS funds over the next 12 months as the AIFM Directive gets implemented across the EU.     
 
Matthews International Capital Management LLC, North America’s largest dedicated Asia investment specialist, has forged a new relationship with Hargreaves Lansdown. The firm’s Lux-domiciled UCITS funds are now available on Hargreaves Lansdown’s Vantage Platform, giving Hargreaves’ large network of clients access to a number of Matthews’ funds. These are: Matthews Asia Dividend Fund, Matthews Pacific Tiger Fund, Matthew’s China Fund and Matthews India Fund. The funds will be available to investors in both US dollar and Sterling retail and institutional share classes. Matthews has more than 20 years’ investment experience in the Asia Pacific region and currently runs approximately USD18billion in AUM, as of April 2012.
 
Commenting on the decision to partner up with Hargreaves Lansdown, Matthews’ head of global business development, Jonathan Schuman, said: “Matthews has been at the forefront of providing investors with a broad range of strategies for investing in Asia. The UK is a strategically important market for us, so we are very excited to make Matthews’ distinctive investment approach and strategies available to UK-based investors on the Vantage platform.”
 
In other news, CTA manager Millburn Ridgefield Corporation (‘Millburn’), this week announced a move to daily dealing for its UCITS-compliant fund. The DB Platinum IV dbX Millburn Multi-Markets Index Fund, the onshore regulated version of the firm’s systematic Multi-Markets managed futures trading program, has improved liquidity terms and now offers investors daily dealing. Since the fund’s inception just over a year ago it has attracted USD108million in AUM. Previously, it offered investors weekly liquidity. The Multi-Markets strategy trades more than 120 futures markets using a combination of trend-following and non-traditional trading techniques.
Barry A Goodman, Executive Vice President of Millburn, said: “Now, with the move to daily liquidity, we think the UCITS offering should be even more attractive to end-investors looking for ways to diversify their existing portfolio risk and deal with continuing volatility in global equity markets.” Alex McKenna, director, head of db-X funds – the structured funds arm of Deutsche Bank – said that increasing the fund’s frequency of liquidity was an example of “how we are continuously working to support our platform partners and enhance our product offering for investors”. Currently, the db-X funds platform has more than USD12billion in assets under management.  

 

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