Lansons Conversations

Newcits or lose-its (Part II)

According to the FT, Efama president Jean-Baptiste de Franssu has joined the chorus of disapproval of UCITS hedge funds, labelling them a ‘traffic accident waiting to happen’ and an exercise among hedge funds in attracting short-term flows. De Franssu has a point, as previously discussed, but at what point will someone step in to bridge this regulator/practitioner disconnect and seek to actually stop a blow up before it happens? After all, isn’t prevention the best cure? Of course that assumes that there is indeed something amiss that requires pre-emptive action. Surely, the hedge fund managers who’ve launched newcits vehicles can point to the AIFM Directive and say they’ve just done what was necessary. In fact, didn’t many of us say when the EU announced the Directive that it was really designed to push fund managers towards the Ucits structure? That is what is happening, so perhaps we should not be too surprised if the AIFM Directive architects are not too quick to react. They would appear, after all, to be getting what they asked for.