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Cheviot AM’s Miller says low risk UCITS are not what investors need

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With the great and good of the global hedge fund community gathering at the annual Gaim International conference in Monaco this week, topics on everything from

With the great and good of the global hedge fund community gathering at the annual Gaim International conference in Monaco this week, topics on everything from what the smart strategies are right now through to the future of the Euro and the implications of China as a global powerhouse has been discussed. Today, hedge fund managers debated UCITS structures with HFMWeek reporting that Nick Walker, managing partner at York Group, warning that restricted liquidity could negatively impact long-term returns. York Group runs approximately USD300million in AUM including a USD60million UCITS fund. Walker was quoted as saying: “Restricted liquidity is important for long-term returns. You have to put a bit more time into the marketing without perhaps the same amount of returns…but it is something we are working on.”

Also speaking was David Miller (pictured), partner of Cheviot Asset Management. He conceded that the advantages of UCITS funds are well known such as better liquidity and more favourable tax treatment for UK investors. But Miller was quick to critique UCITS, in particular the way they are marketed as a low risk way into hedge funds. “This is not really what investors need. With inflation at a higher level than forecast, investors in many UCITS funds are actually suffering a decline in the real value of their wealth,” said Miller. He believes fund managers need to be more ambitious when it comes to performance and doesn’t think returns of 6-7 per cent are attractive enough.         

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