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Hedge funds losing the Ucits battle

Date: Monday, May 10, 2010
Author: FT.com

The hedge fund industry is losing the battle to be the dominant force in the rapidly expanding alternative Ucits arena, according to analysis by Strategic Insight, a New York-based consultancy.

Scores of hedge fund houses have launched regulated versions of their flagship funds in the past 18 months as investors, who were burned by the suspensions and gates imposed by hedge funds during the financial crisis and worried by the risk of fraud in lightly regulated vehicles, increasingly demanded onshore funds.

However, few of these so-called Newcits funds have raised significant assets, with most languishing below $100m (£68m, €78m), said Strategic Insight.

In contrast, a number of more established alternative and absolute return Ucits, predominantly managed by “traditional” long-only managers, are “widening their lead”.