A study released by Deutsche Bank’s Hedge Fund Capital Group this week has revealed that investors expect north of USD185billion to flow into UCITS III absolute return funds over the n
A study released by Deutsche Bank’s Hedge Fund Capital Group this week has revealed that investors expect north of USD185billion to flow into UCITS III absolute return funds over the next twelve months. To put that into context, the entire industry AUM for absolute return UCITS is approximately USD140billion – it’s not often one talks about an entire fund sector doubling in size in the space of year and underscores the real value these funds represent in investors’ eyes. “The outlook for the UCITS III absolute return industry is bullish,” said Daniel Caplan, European head of global prime finance sales and alternative UCITS distribution. “The survey results confirm our experience that these products are appealing to investors, especially the larger institutional players.” In total 184 investors representing more than USD2.1trillion in assets were surveyed, all of whom said that, on average, they expected 20 per cent of their total investments to be locked up in UCITS III-compliant funds by 2013. This is a significant finding and is sure to be music to the ears of fund managers running, or thinking of running, AR strategies. The study found that 29 per cent of investors cited liquidity as the key attraction of UCITS. Even more surprising, many said they were willing to allocate capital into early stage funds without a long track record, with 70 per cent open to the idea of investing in sub-USD50million funds. Anita Nemes, DB global head of capital introduction, said that UCITS III was changing the way investors may “gain exposure to the alternatives industry”.
