WEST PALM BEACH, FL (www.HedgeCo.Net) – The German hedge fund industry is set for significant expansion in the coming four years according to a new study conducted by RCP & Partners. The newsurvey is based on 40 different hedge fund managers. RCP & Partners estimates that �German hedge fund demand by the end of 2008 will range from as little as 10 billion euros to as much as 200billion.
The German Financial markets regulator, BaFin granted its first approval to Deutsche Bank, {DWS} to begin issuing an umbrella of hedge fund of funds to be marketed to German investors. Since such approval few years ago; the hedge fund asset management business in Germany has not picked up as expected, only 1% of the German hedge fund management portfolios are dedicated to hedge funds. In the United States hedge fund portfolios account for over 5% of the total of US managed assets.
According to RCP new research, three factors were responsible for the slow pace of hedge fund investments in Germany, including a �sluggish approval process� by the German financial services regulator BaFin, underwhelming performance of hedge funds this year and general skepticism towards the products among German investors.�
Frank Herring, partner at the law firm Norton Rose Vieregge, argued that part of the problem lies with hedge fund operators, according to Herring, �if hedge fund providers had done a better job of completing the necessary paperwork, BaFin would have been far quicker to approve their products.�
Another manager, Christoph Braun, partner at Lupus alpha, thinks the single most important reason for the slow pace of things relates to the natural skepticism among German investors, particularly institutional ones. Braun said, �Those in the industry who had high expectations for demand were simply not patient enough. The German investor needs time to get to know these products and realize that they will be crucial for diversification and performance.�
Paul Oranika
Editor-in-Chief
HedgeCo.Net
Email: [email protected]
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