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Hedge fund demand to grow, says expert

Date: Wednesday, November 22, 2006
Author: Moneynews.co.uk

Following on from the Financial Services Authority's (FSA's) consultation on hedge funds next year, more people will be likely to want to invest in them, says the chief executive of IFA Promotion.

David Elms has spoken of his belief that due to an increase in media attention focussing on hedge funds, the likelihood is that demand will rise, however, he warned that the investment is not for everyone.

Smaller investors have been advised not to consider investing in hedge funds until they have first consulted an independent financial advisor to determine their options.

Mr Elms said that the people who typically inquire about hedge funds were "perhaps those who are more financially aware and have more funds at their disposal. They would tend to be a more sophisticated investor".

He added: "Whenever you have a review of this nature going on, what it tends to do is to raise the profile of the product area more. Which means that more people are likely to seek advice as more people will be aware of this option."

Early in 2007, the FSA will start consultation about the possibility of introducing hedge funds into the UK market through unit trusts or open ended investment companies and research by TowerGroup estimates that a 15 per cent rise in hedge fund assets will take place between 2006 and 2008.