When was the last time you drank the water you swim in? Ronnie Kirschke
You wonder why you`ve ever lived in any other place, Marc
My team called “Family” has never been more balanced and healthy. Wife and Mother of 2.
Finance Valley Lake Zurich – An Attractive Location for the FinanceIndustry.Conference: Tuesday 20 Sept 2011 (Hotel Seedam Plaza, Pfäffikon)
Hedge funds managers are looking to create EU-domiciled hedge funds to complement their offshore funds, according to new research.
Only a quarter (24%) of hedge fund managers have already re-domiciled offshore hedge funds to an EU domicile while 27% are considering to do so in the future, according to a report by RBC Dexia Investor Services and KPMG.
Meanwhile, almost half of the 49 hedge managers surveyed had not re-domiciled any funds and had no plans to do so.
The purpose of the study, entitled Alternative options: hedge fund re-domiciliation trends in evolving markets, was to adopt a better understanding of the factors contributing to the re-domiciliation of hedge funds into the EU.
The study predicts that co-domiciliation - where hedge funds would offer both offshore and onshore options – is the best solution for hedge fund managers.
More than half (55%) of managers who had already moved their offshore funds to an onshore jurisdiction said they preferred co-domiciliation instead of replacing their offshore funds with onshore offerings. Meanwhile, less than 5% of managers had relocated their funds to an EU onshore domicile.
However, the report claims that the preference of co-domiciliation over re-domiciliation could be short lived due to the continued uncertainty over the AIFM Directive. The majority of hedge fund managers who said they are considering moving their funds to the EU said they would do so before the Directive comes into place in 2013, while 69% said they would consider doing so by re-domiciling their offshore funds to the EU.
The research also showed that alternative structures such as Irish qualified investor funds (QIFs) and Luxembourg specialised investment funds (SIFs) are becoming more popular than the UCITS structure, where 77% of managers considering to set up an onshore structure in the future say they would prefer QIFs and SIFs instead of UCITS funds.
“The market is starting to realise that even though 90% of alternative strategies can be replicated under UCITS, specialised structures such as SIFs and QIFs offer more flexible liquidity and transparency rules for hedge funds. UCITS still offers very robust protection for investors, but clearly the wholesale shift into alternative UCITS some had been predicting has not taken place,” Tom Brown, EMEA head of investment management for KPMG.
Basel, 20 April 2011 – In March 2011,
The long/short European equity fund replicates a strategy used by the manager in a Cayman-domiciled fund.
Reto Barbarits, a project leader at Swiss & Global Asset Management, said: "Institutional investors, mainly from Switzerland but also from the European Union, have told us that they would prefer hedge funds that come from a more regulated environment than an offshore domicile such as the Cayman Islands. We have seen investors asking for that in the last two months.
"One way to achieve that would be to use the European Union's Ucits fund structure, but that would not allow the physical borrowing of stock that the manager uses for short selling. The Swiss regulations don't impose that restriction, and we wanted the manager to have the chance to do what he does exactly, so we domiciled the fund here."
Barbarits said Swiss & Global could have opted for a Cayman-domiciled fund or sold to institutional investors using the private placement rules of each EU country, but there was a clear preference for the Swiss option and its greater regulation: "We see a lot of market potential here," he said.
The fund is denoted formally as an “other fund for alternative investments with special risk”. The authorisation by the Swiss authorities ensures that the fund meets requirements on transparency and investor protection.
While most hedge fund managers live and work in the US or the UK, their funds are domiciled in the Cayman Islands. Definitive figures are unavailable, but industry participants say Cayman is home to about two-thirds of the world's hedge funds.
Gerhard Schreiber, founder and managing partner of Swiss Hedge Capital, said: “The future of the hedge fund industry lies in the regulated environment."
A spokesman for Finma was unavailable for comment.
Barbarits added that the development would provide hedge fund managers with a reason to relocate to his country from the UK or elsewhere in the European Union. He said: "We think we will be able to attract them with this product. Swiss and European institutional investors say they would really prefer a fund with a Swiss domicile, and it is easier to get one if the manager is based in Switzerland and has a licence from Finma."
Jabre Capital, one of the first hedge fund management firms to set up in Switzerland rather than the UK, was brought under Finma's umbrella in 2009, but none of its funds are authorised by Finma.
Swiss & Global is part of GAM Holding, which was spun out of Julius Baer Asset Management in 2009 to be listed on the SIX Swiss Exchange and is the exclusive manager of Julius Baer funds. It had assets under management of Sfr80.4bn at the end of December 2010, and employed more than 250 staff.