"There has been much debate about the complexity of instruments in UCITS and considerable talk about tightening up the eligibility of assets available to UCITS managers. However, I do believe the AIFMD will lead to some of the more complex products being transferred from Ucits to AIFMs", said Massimo Tosato of Schroders Investment Management.
There is speculation AIFMD, which will enable AIFMs to market more freely complex products across the EU, could be a challenge to UCITS absolute return vehicles - which historically have adopted fairly vanilla and liquid strategies. Furthermore, AIFMD-compliant funds’ added investor protections could also incentivise investors to allocate at the expense of UCITS.
Regulators have grown alarmed at some of the products being shoehorned into UCITS. The European Securities and Markets Authority (ESMA) recently clamped down on UCITS Commodity Trading Advisors (CTAs) resulting in some managers rethinking their strategies or in the case of Cantab Capital Partners shuttering their UCITS CTA fund.
Some experts express alarm about the liquidity of complex instruments available in Ucits and have warned gating or a suspension of redemptions in the event of a blow up would irreparably damage the UCITS brand.
Full press release
Schroders press release © Schroder Investment Management Limited
Hover over the blue highlighted
text to view the acronym meaning
over these icons for more information
No Comments for this Article