PRO
* Tried and tested structure with strong global brand
* Regulation, transparency and liquidity meet investor concerns
PRO
* Tried and tested structure with strong global brand
* Regulation, transparency and liquidity meet investor concerns
* Avoids uncertainty over final form of AIFM Directive
* Suits institutions with limited ability to invest in offshore structures
* Passport for distribution throughout Europe and widely accepted by regulators worldwide
* Access to broader spectrum of individual investors
* Avoids discounts to NAV suffered by many quoted alternative funds
* Many hedge fund strategies are less risky than certain long-only funds
* Platforms can help start-up Newcits with service relationships and distribution
* If funds provide full information, investors should be free to make up their own minds
ANTI
* A blow-up could damage the Ucits image
* Investors may be disappointed if returns fail to match offshore funds
* Authorities abroad may restrict access to funds using leverage or derivatives
* Some strategies cannot be replicated effectively given Ucits investment constraints
* Start-up and ongoing running costs are higher than for offshore funds
* Some international investors, such as from the US, could be restricted from investing
* Newcits funds of funds may be less diversified than traditional funds of hedge funds
* Investors could rely on the Ucits brand and skimp on due diligence
* Could disappear as quickly as 130/30 funds, the big fad of 2006-07
Download the full Hedgeweek Special Report on Hedge Funds Regulation UCITS 3 2010
