CORRECTED-UCITS spur European hedge fund asset growth-survey

(Corrects item transmitted on Sept. 7 to clarify compiler of
data in second paragraph)
* UCITS-compliant hedge fund assets up at several firms
* BlackRock, Dexia, M&G among biggest UCITS asset gainers

* Brevan Howard, Man Group hold on to top spots

By Martin de Sa’Pinto

ZURICH, Sept 7 (BestGrowthStock) – Assets in Europe’s top 50 hedge
fund managers rose by 11 percent to $300 billion between January
2009 and June 2010, helped by a surge of inflows into
EU-regulated funds, data released late Tuesday showed.

Data published by the Hedge Fund Journal and sponsored by
fund service provider Newedge showed EU-regulated UCITS funds
have gained traction since the financial crisis, as investors
have sought safe ways to invest in hedge funds.

During the crisis, some managers limited investor access to
their money or blocked withdrawals altogether to avoid being
forced to sell assets at low prices.

To allay investor concerns that this could happen again,
some managers launching UCITS III funds, which impose strict
liquidity requirements, clear asset pricing, and leverage
limits.

Dexia’s UCITS funds helped it jump from 31st place in the
2009 rankings to 13th this year, while M&G investments also
moved up a few places on the back of a recently-launched
regulated fund.

BlackRock, which manages more than $3 trillion, saw hedge
fund assets leap more than 27 percent to $21.7 billion, with its
UCITS-compliant BlackRock UK Absolute Alpha proving particularly
popular among European clients. It is among the world’s largest
‘Newcits’, with around $3 billion.

Fortunes varied among the top managers, with assets in
top-placed Brevan Howard surging almost 24 percent to $31.5
billion, while at local rival Man Group, $1 billion went out the
door.

Some experts had said the restrictions under UCITS would
stifle returns, while others had said it was a fair price to
pay.

“UCITS hedge funds will give up a portion of their
performance because they have to be more liquid. But investors
would also be wise to base their analysis on liquidity, risk and
return rather than just risk-return to gauge performance,” said
Ludovic Ferras at Dexia’s asset management arm.

Liquid hedge fund strategies can now be structured into
funds that offer sufficient protection to retail investors,
helping to swell hedge fund assets said Ferras, who heads
Dexia’s Alternative and Structured Investments team.

New regulations could also push institutional investors
towards these so-called Newcits.

“UCITS funds can provide a clearer answer for insurance
companies in the context of Solvency II rules,” Ferras said.

(Editing by Karen Foster)

CORRECTED-UCITS spur European hedge fund asset growth-survey