AIMA/Simmons and Simmons report examines Italian market

AIMA and Simmons and Simmons have produced a report on Italy's hedge funds market suggesting how its hedge funds industry can plan for the future.

Emma Mugridge, Director of AIMA said: 'Italy has been one of the pioneers of the European hedge fund industry and it has created a structure that meets investor transparency and regulatory need. This survey has identified some of the issues that it now needs to address before it can move on with its market development. None of the findings of the survey are impossible to address and we hope this survey will act as a stimulus for renewed dialogue and, ultimately, change and future development.'

Key findings of the survey include:

• An imbalance between hedge funds, which only have 3% of the market against funds of hedge funds that have 97% of the market;
• The need for the domestic hedge fund industry to become more focused on the international markets;
• The need for specialist skills across the range of strategies but, in particular, the absence of specialist on-shore knowledge which has dampened down market competition;
• The risk averse local market and some legal difficulties act as a brake on the entrepreneurial nature of the business;
• The report found that the market was well regulated and stable;
• The Italian hedge fund market makes up 5% of the European total;
• There is a need to change the general description of funds from 'Fondi Speculativi' (Speculative Funds) to one which reflects the risk management nature of hedge funds.

Generally the survey identified the opportunity to move the domestic market forward by a combination of skills development and developing the entrepreneurial make up of Italian funds.

A copy of the survey is available at: www.aima.org/uploads/AIMAItalySurveyJune06ENGLISH.pdf [1]