New Regulations Spark Investor Interest in Europe
Over the past four months, the BHA analyst team has seen an increase in the number of mandates for funds of hedge funds, especially from European investors. The analysts have also noted a change in these investors’ liquidity requirements: it seems they have become more comfortable with having their money locked up for a longer period of time.
The increasing interest in funds of funds can be traced to a change in European investment regulations. On November 11, 2010, the European Parliament adopted the Directive on Alternative Investment Fund Managers (AIFM). The directive will not only harmonize the marketing rules of alternative products but also radically modify the regulatory framework for non-UCITS funds. This will have an enormous effect on all alternative markets and provide greater transparency and protection for investors.
BHA analysts have also documented a change in liquidity requirements for fund of hedge funds investors based in Europe. During the first quarter, the number of investors that required quarterly redemptions increased by 10% when compared with data from the third quarter 2010. This is a sign that investors are feeling more comfortable with the market and the new investment regulations.
Recently, a BHA analyst spoke to a London-based consultant representing family offices, pension funds, charities, universities, and large institutional investors. The advisory firm has intentions to allocate to funds of hedge funds in the second half of 2011. The firm used to require monthly redemptions, but now it feels comfortable evaluating funds that provide quarterly liquidity.
As new regulations begin to take effect, and as funds of funds and other non-UCITS funds monitor systemic risks and implement investor protection policies, interest from European investors should continue to increase.
http://www.brightonhouseassociates.com/investor-monitor/2011/04/new-regulations-spark-investor-interest-in-europe/
The increasing interest in funds of funds can be traced to a change in European investment regulations. On November 11, 2010, the European Parliament adopted the Directive on Alternative Investment Fund Managers (AIFM). The directive will not only harmonize the marketing rules of alternative products but also radically modify the regulatory framework for non-UCITS funds. This will have an enormous effect on all alternative markets and provide greater transparency and protection for investors.
BHA analysts have also documented a change in liquidity requirements for fund of hedge funds investors based in Europe. During the first quarter, the number of investors that required quarterly redemptions increased by 10% when compared with data from the third quarter 2010. This is a sign that investors are feeling more comfortable with the market and the new investment regulations.
Recently, a BHA analyst spoke to a London-based consultant representing family offices, pension funds, charities, universities, and large institutional investors. The advisory firm has intentions to allocate to funds of hedge funds in the second half of 2011. The firm used to require monthly redemptions, but now it feels comfortable evaluating funds that provide quarterly liquidity.
As new regulations begin to take effect, and as funds of funds and other non-UCITS funds monitor systemic risks and implement investor protection policies, interest from European investors should continue to increase.
http://www.brightonhouseassociates.com/investor-monitor/2011/04/new-regulations-spark-investor-interest-in-europe/
