WEST PALM BEACH, FL (HEDGECO.NET) – The evolution of unregulated hedge funds in Europe has reached advanced stages, as more investors want retail hedge funds to be opened to all investors and notjust the wealthy anymore. Dublin was one of the first European jurisdictions to offer hedge fund domiciles to international hedge fund managers. According to published reports, Luxembourg was not toofar behind as it established a regulatory scenario for the introduction of hedge funds.
The first bold move to introduce retail hedge funds in Europe was initiated by the Central Bank of Ireland, when it issued a Non UCITS Notice [NU 25], authorizing unregulated funds of hedge funds.
According to news reports, UK investors have begun to mount additional pressures on the government regulators to open up retail hedge funds to non-wealthy UK investors. Such a demand was based on the question of unfairness, some going as far as charging that such prohibitions are somewhat discriminatory.
In the UK, hedge funds offered to retail investors are generally registered in other jurisdictions, such as Dublin or Luxembourg. Most of these funds charge minimum investments out of reach of most investors. An increasing number of UK investors� are exposed to hedge funds indirectly through pension funds, and many more of such groups are increasingly committing assets into hedge fund vehicles.
Sebastian Dovey, the managing partner of Scorpio, said that today it has become the norm for wealthy UK investors to have at lease at 5% of their portfolio assets invested in hedge fund vehicles. According to him, up to 20% of the invested assets in hedge funds, belong to more risk tolerant investors. Five years ago, it will be somewhat unusual for such investors to have more than 10% of their portfolios invested with such managers. Dovey also disclosed that today over 80% of the wealthy investors� hedge fund assets are invested through the fund of hedge fund vehicles.
Paul Oranika
Editor-in-Chief
HedgeCo.Net
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