UCITS Hedge Platform Survey 2012: Building routes to a new investment market place pdf

UCITS Hedge Platform
Survey 2012

Building routes to a new
investment market place
or alternative funds that conform to the
Undertakings for Collective Investments in
Transferable Securities or UCITS format 2012
may prove a turning point. It could be the year that
alternative UCITS funds ramp up assets drawn from
retail investor networks, cracking open a lucrative
new avenue for growth outside of the institutional
investor sector. No one expects retail flows to
surpass institutional flows to alternative UCITS quite
yet. But the question of whether alternative UCITS,
sometimes dubbed Newcits, can thrive in the retail
market and in the distribution networks that serve
such investors is likely to be answered one way or
the other over the next year or two.
The alternative UCITS market has been shaping up
for this test since Merrill Lynch began to sign up
hedge funds to its Investment Solutions platform
over five years ago. Since 2005, assets under
management have doubled to around €75 billion
(See Fig.1) after early rapid growth in alternative
UCITS. This followed the introduction of the updated
UCITS III provisions in 2001 which permitted the use
of some basic hedge fund investment techniques,
including moderate leverage, short selling and
derivatives exposure. Following the wide spread
gating that took place in the post-2008 credit crunch,

the UCITS provisions giving minimum 15 day liquidity
suddenly looked appealing and had the virtue of
addressing a key investor concern.
Alternative UCITS evolving
Even so, this is a sector still in a relatively early
phase of evolution. Our own UCITS Hedge database
tracks over 500 funds compared with over 10,000
in the offshore sector. Moreover, regulation of this
new market is developing as the European Securities
and Markets Authority is holding a consultation on
UCITS. Though this is cloaked as an examination of
exchange traded funds and structured UCITS, it is
clear that several aspects of the Newcits phenomena
are being scrutinized closely. This is also the case
with continuing deliberations on the part of the
French regulator, the AMF. Some changes in how
UCITS operate are probably inevitable even if the
broad approach that has developed is maintained.
“The regulatory authorities are focusing on the
migration to UCITS IV,” says Florent Josset, head of
Nomura Alternative Investments Group. “I don’t see
that directly affecting alternative UCITS. Some of
the debate around index structures and synthetics,
especially regarding synthetic and physical ETFs, will
continue but shouldn’t lead to fundamental issues for
UCITS.”
What seems clear is that there will be no turning
back from an increasingly pan-European, onshore
asset management sector using reasonably
sophisticated portfolio management tools. The

commercial advantages UCITS offer, chiefly
transparency and liquidity, are appealing to new
market segments both in terms of geography and
client type. Not only have alternative UCITS fund
structures thrived in Europe, their seal of approval
now extends to investors in the Middle East, Asia
and Latin America. This is attracting the attention of
alternative fund managers, notably in America and
some emerging markets.
“In my view, UCITS is increasingly becoming an
attractive investment vehicle for many investors,
who appreciate the enhanced liquidity, transparency
and regulatory oversight that the structure has
to offer,” says Roman Rosslenbroich, CEO, Aquila
Capital. “At Aquila Capital, we recognized the
advantages that UCITS offers both managers and
investors very early on. We converted our AC Risk
Parity Fund to a UCITS structure in 2008, making it
one of the first absolute return UCITS funds available
in the market. Since then, we have seen significant
inflows into our UCITS fund range, with our AC
Risk Parity strategy recently reaching assets under
management of over €1.3 billion.”
New platform providers
The UCITS sector’s quickly growing horizons attracted
some big new entrants to the market in 2011.
Goldman Sachs International launched a platform for
external managers in the third quarter which now has
three funds. With the entrance of the leading hedge
fund prime broker to offshore funds, it would appear

that the UCITS market is primed for further expansion.
Indeed, several funds have been conspicuous by
their success with each getting to $1 billion in AUM
and beyond: Winton Capital (DB Platinum platform),
Aquila Capital (Alceda platform) and York Capital
(Merrill Lynch Investment Solutions).
Other investment banks have entered the fray,
notably, UBS which acquired the Luxembourg
Financial Group platform in mid-2011. Post-integration
of LFG, UBS is gearing up for a renewed push into
UCITS later in 2012, says Mike Fullalove, the bank’s
global head of alternative fund distribution. He adds
that the refocusing of the UCITS strategy at UBS will
result in additional managers and strategies being
launched on the platform later this year.
Helping managers adapt
Managers of hedge fund investment strategies are
accustomed to advising lightly regulated offshore
funds. In comparison, the legal and custodial
structures for the onshore hedge fund strategies via
UCITS are more circumscribed. Consequently, there
is much learning and adaptation required to tap
the emerging investor appetite for UCITS compliant
investing. The ready solution for managers and
investors is the UCITS hedge fund platform, of which
around 20 are on offer.
“For investors one attraction of investing via a
platform is the additional risk oversight,” says Alex
McKenna, head of fund structuring, at Deutsche
Bank, which runs the db Platinum UCITS platform.

“Deutsche Bank is a trusted institution and has a great
deal of experience with hedge funds and alternative
investments. Investors see the platform environment
as a well controlled environment. Deutsche Bank has
the platform to meet the highest standards within
that regulatory framework.”
For investors, the UCITS format for hedge funds
strategies offers particular benefits. These include:
regulated standards of operation and oversight;
formal controls on counterparty risk; an open-
end fund structure with frequent dealing and
UCITS Hedge Platform Survey
Building routes to a new investment market place
BILL McINTOSH
F
Fig.1 Estimated assets under management in UCITS-compliant hedge funds (EUR)
Source: UCITS Hedge
90
80
70
60
50
40
30
20
10
0
01-Apr-05
01-Aug-05
01-Dec-05

01-Apr-06
01-Aug-06
01-Dec-06
01-Apr-07
01-Aug-07
01-Dec-07
01-Apr-08
01-Aug-08
01-Dec-08
01-Apr-09
01-Aug-09
01-Dec-09
01-Apr-10
01-Aug-10
01-Dec-10
01-Apr-11
01-Aug-11
01-Dec-11
AUM (€ BILLIONS)
U C I T S P L A T F O R M S U R V E Y
2
cost-effective, even when highly complex issues are
involved,” says Hamid Parsa, Director of Business
Development at Alceda. “Whether a client is looking
to launch an alternative investment absolute-return or
long-only fund, Alceda is able to complete the process
of setting up a UCITS fund within a period of six to
eight weeks.”
Reaching investors
Getting a fund onto a platform and approved by

regulators is, of course, just one factor that managers
face in selecting a platform. Cost efficiency and speed
to market are particularly important in the early
stages of a fund’s life. This is notably true of the UCITS
sector where managers are keen to get products
before investors at a time when growth is high and
first mover advantage is tangible. However, once a
fund is up and running distribution takes on primary
importance. With the growing adoption of UCITS in
places as far flung as Chile and South Korea, the value
of having global distribution networks to institutions
commensurate high fund liquidity; and increased
transparency through mandated reporting and risk
measurement processes.
UCITS adds complexity
For hedge fund managers, these very attributes of
a UCITS product introduce challenges. There is the
need to register with another regulator, most often
in Luxembourg or Ireland. In addition, more parties
are needed to run an onshore fund (notably the
custodian as well as the administrator), while there
are also increased burdens on operations, compliance,
marketing and to some extent the investment staff of
the investment advisor.
Having a turnkey solution to handle these matters
is the key attribute of any platform. At Swedish
investment bank SEB, EFA acts as the administrator,
while the bank itself is global custodian. With pre-
approved service providers, a fund can be up and
running on the SEB Prime Solutions UCITS platform in

three to four months compared to the year a manager
might need to launch independently, says Peter
Herrlin, client executive for European hedge funds
with SEB’s prime brokerage unit. “For us it is very
much a part of our prime brokerage offering.”
Freedom of Choice
Among the platforms, there is substantial variation.
Some platform sponsors, like SEB, Merchant and
Matrix, are agnostic about what choices investment
managers make by service function. The choice of
prime banker (that is the onshore equivalent of prime
broker) is typically unrestricted. As a rule, the fund
manager can extend the existing prime brokerage
relationship for the offshore fund to the onshore
product. In some cases, investment banks have set up
a UCITS platform to satisfy prime services clients with
offshore hedge funds.
Sometimes the fund manager has a strong banking
relationship that can influence the choice of
custodian. However, it is often the case that the
choice of administrator and custodian is more
circumscribed than the choice of prime broker/banker.
In some cases, the selection of an administrator
or custodian may be proscribed by the particular
domicile where a fund platform has been set up.
So a platform sponsor with a history of activity in
Ireland, like Lyxor, for example, will find it natural to
select a Dublin based administrator and custodian
with a strong presence there. Similarly Alceda, which
has a business background in Luxembourg, finds it

natural to line up administrators and custodian banks
with a presence and understanding of working in
Luxembourg.
“Our long-standing experience in structuring both
alternative and traditional investments ensures
that our fund set-up process is timely, efficient and
is substantial. And as a number of respondents to this
survey indicated, moves to develop distribution to
retail investors are being ramped up.
“Using a UCITS platform’s marketing networks is
key since it is better to market under a well known
platform as it gives extra credibility,” says Apostolos
Avlonitis, portfolio manager of RP Capital Group
which recently launched the RP Systematic Emerging
Markets UCITS Fund on ML Capital’s Montlake
platform. He also cites the advantages of a cheaper
initial set up and more efficient regulatory application
process since platforms have professionally trained
UCITS staff with knowledge of compliance and risk
management procedures.
Growing quickly
One of the faster growing platforms in 2011 is the
FundLogic offering run by Morgan Stanley. Several
fund managers have embraced its strong European
distribution capabilities.
At the same time, the platform has appealed to
investors’ appetite for diversification by enlisting
a growing range of managers, many of whom are
outside of Europe.

“For hedge fund managers, FundLogic offers
a completely outsourced and turnkey solution
enabling them to tap into the UCITS market
while benefiting from Morgan Stanley’s unique
distribution capabilities, including institutional
investors and intermediaries,” says David Armstrong,
the investment bank’s Global Head of Fund Linked
Products. “To investors, we provide a comprehensive
range of highly skilled investment managers. We
believe our edge lies in our ability to offer a large
“The regulatory
authorities are focusing
on the migration to
UCITS IV,” says Florent
Josset, head of Nomura
Alternative Investments
Group. “I don’t see
that directly affecting
alternative UCITS. Some
of the debate around
index structures and
synthetics, especially
regarding synthetic
and physical ETFs, will
continue but shouldn’t
lead to fundamental
issues for UCITS.”
UCITS Platform Operators
• Alceda Fund Management
• Lyxor Asset Management

• Deutsche Bank Platinum
• Merrill Lynch Investment Solutions
• Universal – Investment
• Schroder GAIA
• Morgan Stanley FundLogic Alternatives
• UBS Liquid Alpha
• Matrix
• SEB Prime Solutions UCITS
• Merchant Capital
• Montlake UCITS
• Goldman Sachs International
• Nomura
• Prodigy Capital Partners
U C I T S P L A T F O R M S U R V E Y
3
lifeline even though some strategies weren’t suited
to it. That accounted for the big flurry of launches.
But we are strong believers in the continuity of
growth in the UCITS market. I can’t see a scenario
where the UCITS market will become diminished.”
Managers more discerning
It is probably no bad thing that fund managers have
become more discerning about the suitability of a
strategy to the UCITS framework. Bubbles beget
busts. With memories of 2008 still fresh a more
considered approach to the sector’s development
is in the interests of managers, platform providers
and, of course, investors.
Merrill Lynch, now Bank of America Merrill Lynch,
was the first investment bank to launch a UCITS

platform. BAML is continuing to build its fund
offering even though it has come through the initial
growth phase that newer platform providers are still
experiencing.
“We are continuing to broaden our offering to
diversify our product range,” says Miriam Muller,
head of BAML’s fund platform group. “The mandates
in the pipeline will take us beyond 20 funds and
we have said the optimal number is 25 to 30 funds.
We have reached critical mass and have a broad
selection of strategies available to investors.”

Regulation evolving
Several regulatory changes will impact the evolving
UCITS landscape in 2012. Platform operators
have until mid-year to finalise Key Investment
Information Documents or KIIDs. Operators will also
be studying the advent of UCITS V and whether they
will incur higher costs from assuming custodian
responsibilities and related liabilities.
Perhaps the biggest change, however, is the retail
distribution review or RDR that comes into effect
in the UK at the year-end. Under RDR, third party
marketers, notably IFAs, will charge a direct advisory
fee from investors instead of taking an upfront fee.
“It will become clear what investors are paying to
whom and how much,” says BAML’s Muller. “We
think that will level the playing field to the extent
that there will be greater transparency on fees
and more emphasis placed on fund quality for the

end investor in terms of the various competing
products.”
The timing of RDR may dovetail with the evolution of
alternative UCITS to seek retail channels to market.
Certainly, the growth in alternative UCITS platforms
has resulted in a number of operators coming into
the market to focus exclusively on tapping the
retail investor opportunity. Here the approach of
Merchant Capital, which has acquired a network
of 120 IFAs, is instructive. “We see the opportunity
number of US based investment managers under
our unique platform, allowing investors to obtain
a diverse range of investment exposures by
accessing a wide range of managers under one fund
umbrella.”
Land grab slows
With 2011 just completed two data points in the
UCITS sector stood out. First, not only hedge funds
but also UCITS funds lost money. But the performance
of the onshore sector was far less volatile. The
UCITS Hedge Index ended 2011 with a drawdown of
4.55% compared with an 8.87% fall for the offshore
bellwether HFRX Global Hedge Fund Index.
The second data point is that new launches for
alternative UCITS funds in 2011 fell below the levels
recorded in both 2009 and 2010. Indeed, launch
volumes in 2010 were approximately double the
levels recorded during the past year. Several reasons
may help explain this. First, there is some evidence
that the three main UCITS strategies – long/short

equity, managed futures and macro – had already
seen fund origination outpace capital allocation.
So a slowdown in line with a falling off in investor
commitments was understandable. There is also
anecdotal evidence that some managers delayed
setting up new UCITS funds to concentrate
exclusively on steering existing funds through a
highly difficult market environment.
“There were a lot of funds that weren’t as successful
as they would want to be,” says George Cadbury,
head of Merchant Capital’s UCITS umbrella for
alternative funds. “Some managers saw UCITS as a
for UCITS being the retail market,” says Cadbury.
“It is very much an educational drive. Many IFAs
are unaware of the opportunity in UCITS,” he
says, noting that market volatility underlines the
attractions of hedge funds as risk managers. “We
are hoping to change this sentiment a little bit and
offer a better alternative.” One noteworthy success
in the retail UCITS market is BlackRock UK Absolute
Alpha, which has taken in over $4 billion.
Another is Schroders GAIA Egerton European Equity,
which has attracted over $600 million from investors
who like its success in achieving better than equity-
type returns with less risk.
“Schroders is a very reputable asset management
firm with a high quality product offering
and distribution,” says Jeff Blumberg, CEO of
Egerton Capital, which manages the fund. “Our
collaboration with Schroders thus far has been

seamless and, most importantly, a success for our
mutual clients.”
Given these successes and the fact that around
$8 trillion is invested in the UCITS market,
overwhelmingly in long only funds, it’s clear the
opportunity for Newcits is palpable. Perhaps
nowhere is this more the case than in Germany. Not
only is it Europe’s biggest market, it is one where
alternative fund investing has been hampered
by both the business culture and tax provisions.
But German platform operators like Alceda and
Universal-Investment have made great strides in
“We are strong believers
in the continuity of
growth in the UCITS
market. I can’t see a
scenario where the
UCITS market will
become diminished”
says George Cadbury,
head of Merchant
Capital’s UCITS umbrella.
“One thing we offer
managers is the whole
hearted backing of our
distribution network,”
says Gavin Ralston,
global head of product
with Schroders. ”We sell
these funds as if they

were Schroder funds. We
have strong distribution
of UCITS.”
U C I T S P L A T F O R M S U R V E Y
4
For some specialist UCITS platform operators,
securing distribution lines is a function of setting up
ties with specialist teams targeting specific investor
niches. ML Capital, the operator of the Irish-
domiciled Montlake UCITS platform, has cemented a
significant distribution agreement with Acolin Fund
Services of Zurich. It will provide managers on the
platform with access to several hundred banking
groups across the German and Swiss marketplaces.
Establishing distribution
“The market is clearly recognising the vital
importance of distribution which a well placed
UCITS platform can deliver,” said John Lowry,
chairman of ML Capital.
“The deal with Acolin will further enhance our
competitive position as these distribution deals
can often take a year or more to structure. We
are currently also in discussions with a number of
distribution partners and private banking groups
in Latin America and Asia, which are experiencing
significant demand for alternative UCITS products.” He
bringing alternative fund products onshore to the
country’s huge investor community.
“We will see a lot of new asset managers from
overseas offering well established successful

strategies for German investors,” says Stefan Klein,
an executive in investment product management
with Universal-Investment. He cites the US and
Scandinavia, among others, as among the main
centres for Newcits managers now marketing to
German investors.
Klein confirms that the Alternative Investment
Fund Manager Directive, even though it doesn’t
take effect presumably until mid-2013, is having an
impact on the Newcits market. “AIFMD is mainly
having a positive effect because we see many
offshore managers coming onshore now,” he says.
“Sometimes it is hard to handle all the issues, but
net, net it has had a positive effect.” Luxembourg
and Ireland have attracted most of these funds,
but Germany, the UK and new centres in Malta and
Gibraltar are also gaining funds.
The main emphasis on some UCITS platforms falls
squarely on distribution. With Matrix Group, for
example, there is more flexibility for managers to
come on board with their own service providers and
the partnership with funds is a genuine two way
process.
“The main thing is the breadth of the distribution
channel,” says Luke Reeves, a director with Matrix
and head of retail and institutional business
development. “We can work with existing teams
as appropriate. Quite a lot of the groups we work
with have their own sales teams. But we can be
complimentary and work with them to develop

different sales channels.”
A network effect
Some of the UCITS platforms are being run by big
institutional fund management groups combining
internal and external funds. External managers on
such platforms get highly visible brand recognition
and global scale. At Schroders, the three funds on
the platform advised by external managers come
from very prominent hedge fund firms: CQS, Egerton
Capital and Sloane Robinson. Indeed, Schroder
GAIA Egerton European Equity has raised over $600
million since inception in November 2009.
“One thing we offer managers is the whole-
hearted backing of our distribution network,”
says Gavin Ralston, global head of product with
the fund manager. ”We sell these funds as if they
were Schroder funds. We have strong distribution
of UCITS not just in Europe but in Asia and Latin
America. We can position UCITS funds to be sold
globally.”
sees demand for alternative UCITS growing in some
of the classic hedge fund strategies, notably global
macro and managed futures along with a renewed
interest in global emerging markets strategies.
The growing interest in the UCITS sector among
investors is seeing some start up managers consider
launches early in a fund’s life cycle. Many of the
funds on the more established platforms proved
themselves initially offshore before evolving a UCITS
offering in the last few years. It means they have

a substantial investor base and commensurate
financial resources. But with start-up and emerging
managers resources are likely to be more limited.
For them, a UCITS wrapping with a pared down cost
base may prove to be very attractive.
A soon-to-launch UCITS platform from Prodigy
Capital Partners is aiming to address this market.
Prodigy is awaiting regulatory approval for an
umbrella structured Luxembourg SICAV, which will
host its merged UK UCITS and Cayman emerging
market fund. When the platform is established in
the coming months, a fund will be able to launch in
UCITS format for a one-off flat fee of circa €25,000
(as well as avoiding the typical repeating share of
the management fee that other platforms charge).
That will cover start-up costs, local fees, directors
and audit. Citi is tasked with being the depositary
and custodian, with Andbanc the administrator.
“There are quite a number of small start-up fund
managers wanting to get a UCITS,” says David
Robinson, managing principal and portfolio
manager with Prodigy. “They want to focus on
raising money rather than spend time going through
the UCITS setting-up process on their own. We
have gone through this process and now we can
offer the same to a manager with minimal pain or
interruption. We think there may be people who
want to join our syndicate and share the costs,
which are extremely competitive and attractive to
small and mid-sized funds.”

The cost savings come from combining small
managers to create economies of scale. The
managers maintain complete operational
freedom—unlike large bank platforms, a fund won’t
be tied to any particular provider for, say, swaps or
other business needs. Instead, the aim is to ensure
that individual fund managers aren’t subsumed in
a vastly bigger entity, enabling them to build their
own brand equity and evolve their businesses as
required.
“The beauty of this concept is low cost, tremendous
speed and flexibility combined with own branding
and ownership,” says Robinson. “Once set up, a new
manager can focus on building their business and
selling their fund.”
THFJ
“There are quite a
number of small start-
up fund managers
wanting to get a UCITS,”
says David Robinson, of
Prodigy. “They want to
focus on raising money
rather than spend time
going through the UCITS
setting-up process on
their own. We have gone
through this process
and now we can offer
the same to a manager

with minimal pain or
interruption.”
U C I T S P L A T F O R M S U R V E Y
5
ntrepreneurs invariably are motivated to build
a company when they are unable to find an
existing offering in the market that satisfies
their needs. From making this discovery to taking
the initiative to fill this market gap is often just a
small step.
Originally, Alceda Fund Management S.A. set
up private label funds (for clients such as family
offices) who wanted to put their own brand on
fund products. From these small beginnings the
business has evolved substantially as filling one
market gap opened up views of others. Established in
Luxembourg in 2007, Alceda has grown to become a
leading independent structuring specialist providing
institutional investors, asset/fund managers, banks
and family offices with tailored investment solutions.
It has assets under administration of $7 billion.
The Alceda UCITS Platform (AUP) supports $4.5
billion in a broad range of UCITS funds. The single
best resource is the 65-strong team based in
Luxembourg, the depth and breadth of which serves
the firm well in the setting up and operational
phases. As a specialist in structuring there is a
significant legal/set-up team, a risk team and an
operations team to handle pre-trade and post-trade
controls. The team’s scale will be a big plus when

the next wave of regulatory change hits. Smaller
competitors may struggle with limited personnel
to adapt to the increased demands of UCITS IV and
UCITS V, for example.
As a member of the Aquila Capital Group, Alceda has
grown out of an asset management company. The
UCITS offering is as flexible as those on any platform,
giving life to the firm’s tag line: ‘Tailor-Made
Structuring Solutions made in Luxembourg’. Whilst
many platform providers profess agnosticism to
which service providers managers chose, the phrase
‘open architecture’ is well applied when it comes
to Alceda. Managers coming on to the platform
have genuinely free choices for the role of fund
administrator, custodian bank, prime brokers (swap
providers) and auditors.
According to Hamid Parsa, Director of Business
Development at Alceda, this flexibility is necessary to
fulfil the corporate philosophy that the form should
follow the function. “We shape the product for what
is best for the investment strategy, not the other
way round.” He says this is only possible because of
the team experience in structuring and in the design
of different investment vehicles – a real asset for
managers coming onto the platform now. He adds:
“What sets us apart is our ability to bring managers’
investment ideas to the market as they originally
intended them. For example, if certain strategies
do not fit the UCITS format, Alceda has also the
capability to offer other structuring solutions, such

as SIF vehicles. In working with Alceda managers do
not have to curtail their investment objectives or
compromise the strategy’s risk-return profile.”

Alceda has a three step process to bring funds onto
the platform (see Fig.1). From initial consultation
to fund launch can be as short as six to eight
weeks. If time-to-market is an important factor for
an investment manager using an experienced and
expert guide is imperative. Clients are supported
by a client advisory team during the entire lifetime
of the products, and a dedicated project manager
works with the clients through each stage.
Setting up a UCITS fund independently can be
costly and time consuming for a manager unfamiliar
with the ways of the CSSF. For small to medium-
sized managers, who often do not have the same
operational set-ups and resources that the big
players have, it makes sense to join a platform like
AUP, which offers them a ready-made advantage.
The platform handles all aspects involved in the
product launch, thereby enabling the fund manager
to focus on their core competency of return
generation. Once a manager is on AUP launching
a second fund is very easy. Alceda employs a
standalone structure, which gives each new fund its
own individual fund umbrella. As a consequence,
the funds on AUP are completely independent. An
additional fund can be in place in a few weeks.
A one stop shop

“We aim to provide a full range of services under one
roof – a one-stop shop for bringing funds to market,
if you like,” says Parsa. Alceda has developed a lot of
the technology itself instead of outsourcing as much
as possible, the route which most platform providers
take. “This should provide efficiencies to the client
in setting up. We provide a seamless vehicle for fund
managers to run their own UCITS funds, and for
small-to-mid-size firms we can be very competitive.”
Alceda is looking to grow the distribution capabilities
it can deploy on behalf of funds coming onto the
platform. It uses a hybrid approach, having a
dedicated third party distribution team for sales in
Alceda Fund Management
Independent platform advances open architecture
SIMON KERR
E
Fig.1 Alceda Fund Management’s 3 step process to fund launch
Step 1 Step 2 Step 3
6 - 8
weeks later
Initial consultation/
meeting
Check feasibility of
strategy
Due diligence
Prepare a quotation
•
Your new UCITS fund
•

Decision-making
Drafting fund
documents
Conception of marketing
& distribution strategy
•
•
•
Face-to-face meeting
in Luxembourg or at
your office
Defining your
requirements
Clarifications of
trade details
•
•
•
•
•
•
Source: Alceda
Fig.2 Investment Strategy
Macro Discretionary 16.7%
Macro Systematic 16.7%
Fund of Funds 33.3%
Relative Value 33.3%
Source: UCITS Hedge
U C I T S P L A T F O R M S U R V E Y
6

AUP span a broad range of strategies, including long
short equity, global macro, CTA, multi strategy, fixed
income and emerging markets. Five Newcits funds
launched on the platform in 2011.
“Managers want to enter the UCITS world to tap
into different sources of capital than feed into their
offshore funds,” says Parsa. “We can help them do
that.”
Alceda Fund Management sees its independence
as a virtue. No tie is dominant making for truly
open architecture. The individual fund umbrella
approach can offer both fast time- to-market and risk
containment, while the team’s experience ensures
smooth execution for clients.
THFJ
the UK and Germany. In addition, Alceda provides
comprehensive distribution capabilities, ranging
from a sales and marketing service to organising
dedicated road shows and events. It has even
drummed up media coverage and put together
timetables for one-on-one meetings with investors.
Alceda’s distribution efforts not only focus on
Germany, where distribution channels include
institutional investors such as pension funds,
insurance companies and saving banks as well as
distribution platforms, but also reach the
UK and Asia.
About $2.5 billion of the funds under administration
on the Alceda platform are in Newcits funds, a strong
area of growth for the company. The funds on the

Daily 83.3%
Weekly 16.7%
Fig.4 Liquidity
Source: UCITS Hedge
UK 16.7%
Rest of Europe 16.7%
Germany 66.7%
Fig.3 Manager location
Source: UCITS Hedge
“We shape the product
for what is best for
the investment
strategy, not the other
way round.”
U C I T S P L A T F O R M S U R V E Y
7
CITS hedge platform providers make great
play of the time to market advantage that
they can confer on their clients. And indeed
the platform sponsor can be so adept at their own
part of the process (and in co-ordinating the work
of other advisors and other service providers) that
the project management element of getting to the
point of launch is often well executed. So the UCITS
hedge fund can be brought to market promptly.
Lyxor, the asset management business owned by
Société Générale of France has emphasized how
long it has taken them to get to the point of starting
their own platform for alternative funds in the
UCITS format.

“It took us over a year to launch our UCITS hedge
platform, which we call Lyxor Dimension,” explains
Nathanael Benzaken, Lyxor’s Head of Managed
Account Development, “because we wanted to
make sure that we structured it in the right way.
Also we wanted to make it scalable, i.e. to have the
infrastructure in place and the capability to add
funds relatively quickly.” It could not have been the
specific knowledge that was lacking – Lyxor has been
in the hedge fund business for 13 years, and has a
fund of funds operation, structuring capability
specifically related to hedge funds, a hedge fund
index family of products and the well-know managed
account platform business.
Conceptually Lyxor are coming at running a platform
for UCITS hedge funds differently from most
providers. “We take the view that a UCITS hedge fund
is still a hedge fund,” expounds Benzaken. “We are
bringing hedge fund strategies into the UCITS arena
with the objective to deliver genuine hedge funds
capable of delivering a strong value proposition for
investors while limiting the potential performance
drag from the UCITS constraints. To achieve this,
we focus on managers with a strong investment
proposition focusing on alpha generation.” To
reinforce the emphasis Lyxor puts on parity between
onshore and offshore hedge funds, if the UCITS
version of a given hedge fund would be a pale copy
of the strategy, Lyxor would pass on that strategy,
“because in the end it will disappoint investors”

explains Benzaken.
Lyxor has developed a range of UCITS hedge fund
index products which are based on the platform, and
has a number of UCITS funds of hedge funds on Lyxor
Dimension. There is a Lyxor Absolute Return Fund on
the UCITS hedge platform, too. Illustrating Lyxor’s
vision of what a UCITS hedge platform should seek to
do, the first external manager on the platform is the
Lyxor/Old Mutual Global Stat Arb Strategy Index Fund
which was launched in August. Statistical arbitrage
strategies seek to generate alpha by exploiting short-
term liquidity mis-pricing through a very liquid, very
diversified global equity market neutral approach.
Lyxor found a way to put the full investment strategy
into the UCITS format without tweaking the strategy
at all. “This is a pure hedge fund in a UCITS wrapper,”
claims Benzaken.
The Lyxor/Old Mutual Global Stat Arb Strategy Index
Fund gives access to a global market-neutral equity
fund, which has very low correlation to the equity
market, and at the same time is extremely liquid. The
Lyxor view is the UCITS hedge fund universe needs
more of these managers focusing on alpha generation
and lower correlation. Lyxor’s objective is to add
more managers that qualify with these criteria to the
platform; that is to carry on putting good hedge funds
in a UCITS wrapper. Whilst Lyxor has over a hundred
hedge funds on their offshore managed account
platform, their ambition for Lyxor Dimension, the
UCITS hedge platform, is to on-board 10-12 new funds

over the next year. Clearly, management expects to
be very selective for a while yet.
Having the tools
Lyxor, as a long standing investor in hedge funds,
believe it has the tools to be appropriately selective.
Lyxor has an embedded investment culture. It has 10
analysts of hedge funds and has the software toolkits
to analyse hedge fund portfolios and break down the
risk attributes. The firm also has a tried and tested
Lyxor Asset Management
Combining the elements to industrialise the process
SIMON KERR
U
Fig.1 Investment Strategy
Macro Discretionary 6.3%
Fund of Funds
87.5%
Relative Value 6.3%
Source: UCITS Hedge
Fig.2 Number of funds
Internal Funds 87.5%
External Managers Funds 12.5%
Source: UCITS Hedge
U C I T S P L A T F O R M S U R V E Y
8
to play. There are more than 25 sales staff at Lyxor,
which senior management described as “based on all
the continents.” In addition Lyxor has a client service
team and its own marketing team.
On top of direct sales Lyxor utilizes contacts with

other distributors, such as networks set up by asset
managers and private banks. These are existing
relationships that have matured through work on
other Lyxor products, which are themselves hedge
fund related. A large proportion of the potential
capital flows will come from the likes of insurance
companies and pension funds. After that the most
significant source of demand will be from private
banking customers, according to Lyxor. Another
potential source of interest could be funds of
UCITS hedge funds, according to the French
alternatives specialists.
due diligence process; and knows how to recognize
style drift. According to Lyxor, this is what is missing
from the approach of many of those running platforms
for UCITS hedge funds – an understanding of risk
management and the investing side.
The upcoming period is a busy one for scheduled fund
launches. Lyxor has just added two new funds at the
of January. Management’s intention is to broaden the
Lyxor Dimension offering first by adding funds that
offer a range of investment strategies. The planned
launches encompass a short-term CTA run by IKOS,
and a long-term CTA fund, an emerging markets-
focused CTA operated by Caxton and an event driven
fund. Lyxor is currently meeting managers who run
equity long/short and event driven strategies in
various markets, looking for suitable candidates.
A constraint, limiting the number of funds/strategies
suitable for putting in a UCITS wrapper, is scalability.

“The market for UCITS as a whole is a large market
and UCITS hedge funds are a growing part of it, and
we have to secure enough capacity with a manager to
meet the potential demand,” explains Lyxor’s Head of
Managed Account Development.
When it comes to distribution, a capability which is
a highly ranked factor in platform provider selection
by managers, Lyxor Dimension has a strong hand
Lyxor’s mindset in structuring UCITS hedge funds – a
real hedge fund in an onshore wrapper – is different
from most platform providers. The firm has put
its own in-house products on the platform first to
iron out the wrinkles of a start-up operation before
welcoming externally managed funds.
The first externally managed fund on Lyxor Dimension
is in a strategy that some platforms may struggle to
work with, demonstrating the technical proficiency of
the platform. On top of that the distribution capability
is bigger than most in direct sales staff, and the
marketing capabilities go well beyond that. Whilst the
high quality infrastructure has yet to be tested by a
mass of external managers, there are strong elements
in place for Lyxor Dimension to realize the ambition to
industrialise the processes of a UCITS hedge platform
for manager clients and investors alike.
THFJ
Table 1 Service Providers for Lyxor Dimension UCITS Hedge Platform
Source: Lyxor AM
Fund Domicile
Custodian

Administrator
Prime Broker
Majority of Dimension Fund domiciled in Luxembourg; Single Manager Funds
domiciled in Ireland
CACEIS (part of the Credit Agricole Group) for most funds
CACEIS (part of the Credit Agricole Group) for most funds
Wide Range (over 10 available)
Fig.4 Liquidity
Weekly 15.4%
Daily 84.6%
Source: UCITS Hedge
Fig.3 Manager location
New York 6.3%
Paris 87.5%
London 6.3%
Source: UCITS Hedge
U C I T S P L A T F O R M S U R V E Y
9
n alternative UCITS platform needs to offer a range of investment strategies
to build a diversified offering to attract a broad selection of investors over
time. Deutsche Bank, including a wide range of internal funds, offers such
diversity with around 70 funds.
But even in the midst of such a wide offering, stretching across Newcits and
absolute return products, one fund stands out. It is the DB Platinum IV dbX
Systematic Alpha Index, driven by Winton Capital’s managed futures strategy,
which leads Newcits funds with over $1.6 billion AUM. This has helped Deutsche
Bank take the top slot amongst platform operators with AUM of nearly $2.49
billion according to our UCITS Hedge database.
It demonstrates the scope that there is for successful asset raising,” says Alex
McKenna, head of fund structuring, at Deutsche Bank. “We are looking to build

on that.” If 2011 is any guide – when the platform added alternative UCITS from
Paulson & Co., Omega Overseas Partners and Sloane Robinson – the New Year will
see DB Platinum sign up more top-ranked managers.
14 UCITS Hedge Funds
DB Platinum IV QCM GDP Index Fund
DB Platinum Tosca Mid Cap Equity Fund
DB Platinum IV dbX Millburn Multi-Markets Index
DB Platinum FX Concepts Global Currency Fund
DB Platinum IV dbX Systematic Alpha Index
DB Platinum V Hermes Absolute Return Commodity
DB Platinum AIMhedge Index
DB Platinum IV Ikos FX Fund
DB Platinum IV Lynx Index
DB Platinum IV Paulson Global
DB Platinum Traxis Global Equity Macro
DB Platinum Sloane Robinson Asia
DB Platinum Omega
DB Platinum IV Fortinbras PRISM Index
Deutsche Bank Platinum
UCITS Hedge Platform Survey 2012
A
Fig.4 Investment Region
Global All 69.7%
Global Emerging 3.0%
Europe All 3.0%
Asia All 3.0%
Global Developed 9.1%
Europe
Developed 12.1%
Fig.2 Liquidity

Weekly 33.3%
Daily 66.7%
Source: UCITS Hedge
Fig.3 Manager location
London 81.8%
New York 12.1%
Stockholm 3.0%
Liechtenstein 3.0%
Source: UCITS Hedge
Fig.1 Investment Strategy
Long/Short
Equity 9.1%
Relative Value 12.1%
Fund of Funds
12.1%
Macro
Systematic 42.2%
Multi-strategy
9.1%
Event Driven 6.1%
Macro
Discretionary 9.1%
Source: UCITS Hedge
U C I T S P L A T F O R M S U R V E Y
10
he pioneering alternative UCITS platform run by Bank of America Merrill
Lynch underwent redemptions in the second half of 2011 that saw total
assets fall to $1.7 billion from a high of $2.3 billion. But this is likely to be a
temporary phenomenon for several reasons.
One factor that augers well for the MLIS platform is the marquis quality of several

if its funds. Among these well regarded managers are event driven specialists York
Capital, multi-strategy giant Och-Ziff as well as Marshall Wace and AQR. Such funds
are still attracting assets from an institutional investor base.
Another factor in the platform’s favour is the gravitational pull to both new funds
and investors exercised by its lengthy track record. This gives rise to a virtuous circle
of funds succeeding on the platform which in turn serves to attract top performers
among managers looking to launch a UCITS product.
15 UCITS Hedge Funds
MLIS Boyer Allan Asian Long-Short UCITS Fund
MLIS York Event-Driven UCITS Fund
MLIS Theorema European Equity Long-Short UCITS Fund
MLIS GLG European Opportunities UCITS Fund
MLIS CCI Healthcare Long-Short UCITS Fund
MLIS Zweig-DiMenna US Long-Short Equity UCITS Fund
MLIS Marshall Wace TOPS UCITS Fund (Market Neutral)
MLIS York Asian Event-Driven UCITS Fund
MLIS Graham Capital Systematic-Macro UCITS Fund
MLIS AQR Global Relative Value UCITS Fund
MLIS Perella Weinberg Partners Sustainable Resources Long-Short UCITS Fund
MLIS Och-Ziff European Multi-Strategy UCITS Fund
MLIS Westchester Capital Merger Arbitrage UCITS Fund
MLIS TT Financials UCITS Fund
MLIS Torrus Funds - Merrill Invest Structured Alpha
Merrill Lynch Investment Solutions
UCITS Hedge Platform Survey 2012
T
Fig.4 Investment Region
Global All 47.4%
Asia ex-Japan 5.3%
North America 10.5%

Asia All 5.3%
Global Developed 15.8%
Europe
Developed 15.8%
Source: UCITS Hedge
Fig.2 Liquidity
Weekly 73.7%
Daily 26.3%
Source: UCITS Hedge
Fig.3 Manager location
London 36.8%
New York 42.1%
Hong Kong 10.5%
Other US 10.5%
Source: UCITS Hedge
Fig.1 Investment Strategy
Long/Short
Equity 36.8%
Relative Value
21.1%
Macro Systematic
15.8%
Multi-strategy
15.8%
Event Driven
10.5%
Source: UCITS Hedge
U C I T S P L A T F O R M S U R V E YU C I T S P L A T F O R M S U R V E Y
11
niversal-Investment traces its origins back to 1970 well before the first

UCITS regime began to emerge in the mid-1980s. The idea then is the
same as now: Universal-Investment takes care of all facets of the overall
planning, implementation and administration for partner funds. Since the
outset, independence and transparency have been core components of Universal-
Investment’s philosophy.
Universal-Investment has expertise in domiciling funds in both Germany and
Luxembourg. The choice of domicile may be determined by a fund’s strategy and
the preference of its portfolio managers. One advantage for managers, according
to Universal-Investment, is that in the German market it is easier and quicker to
launch funds than in Luxemburg where there is still fall-out from a Madoff feeder
fund being domiciled there.
Universal-Investment has a wide range of alternative UCITS, including long/short,
macro, relative value and event driven. Over all its platforms the firm has €130
billion in funds under administration and its hosted alternative UCITS funds are
running $1.25 billion.
13 UCITS Hedge Funds
York Lion Merger Arbitrage Liquidity Fund UI
Premium Currencies UI
Estlander & Partners Freedom Fund UI
Absolute Return Plus
Acatis Gané Value Event Fonds
Glocap Vega
High Discountportfolio Universal
Select Range Universal Fonds
Sentix Fonds 1
Stay-C Commodity Fund UI
Varengold Alternative Alpha
Saxo Invest Global Evolution Emerging Markets FX
Acatis Global Value Total Return UI
Universal-Investment

UCITS Hedge Platform Survey 2012
U
Fig.4 Investment Region
Global Developed
38.5%
Global All
30.8%
Europe Developed
23.1%
Global Emerging
7.7%
Source: UCITS Hedge
Fig.2 Liquidity
Daily
100%
Source: UCITS Hedge
Fig.3 Manager location
Germany
69.2%
Denmark
7.7%
Finland
7.7%
Switzerland
7.7%
New York
7.7%
Source: UCITS Hedge
Fig.1 Investment Strategy
Fund of

Funds 7.7%
Event Driven 7.7%
Long/Short
15.4%
Relative Value 15.4%
Macro
Systematic 23.1%
Macro
Discretionary 30.8%
Source: UCITS Hedge
U C I T S P L A T F O R M S U R V E Y
12
he Luxembourg-based Schroder GAIA alternative UCITS platform has only
three external funds but packs a big punch with investor assets totalling
$1.05 billion.
Schroder is looking to diversify the offering with more strategies with a global
macro offering something that is being actively considered. A strong market
neutral fund is also something that could be attractive to investors.
“We have tried to strike a balance between getting a lot of funds on the platform
and only going for the really top names,” says Gavin Ralston, global head of
product with Schroder Investment Management. “We have been selective. But
the names we have got are right among the best in the industry.”
Though Schroder wants to grow the platform, it is too early to say what number
of funds it will eventually hold. Ralston notes that the focus is more on quality
than quantity.
The Schroder distribution network should ensure that many alternative UCITS
managers will be clambering to come aboard. The fund manger’s links to private
banks and institutions will ensure that managers who do make the grade have a
solid opportunity to attract allocations.
3 UCITS Hedge Funds

Schroder GAIA Egerton European Equity
Schroder GAIA CQS Credit
Schroder GAIA Sloane Robinson Emerging Markets
Schroder GAIA
UCITS Hedge Platform Survey 2012
T
Fig.4 Investment Region
Global Emerging
33.3%
Global All
66.7%
Source: UCITS Hedge
Fig.2 Liquidity
Weekly
100.0%
Source: UCITS Hedge
Fig.3 Manager Location
London
100.0%
Source: UCITS Hedge
Fig.1 Investment Strategy
Long/Short Credit
33.3%
Long/Short Equity
66.7%
Source: UCITS Hedge
U C I T S P L A T F O R M S U R V E YU C I T S P L A T F O R M S U R V E Y
13
he explosion in assets on the Morgan Stanley FundLogic Alternatives
platform makes it a winning performer over the past year. Though FundLogic

is a well established distribution platform it only began serving as a platform
for alternative UCITS in the third quarter of 2010. In just over a year it has recruited
14 funds and raised $995 million from investors.
David Armstrong, global head of fund-linked products, is looking to bolster the
platform’s offering with several liquid hedge fund strategies, notably with the
addition of some commodity trading advisors. Other areas where Armstrong sees
strong investor demand include: European long/short equity, macro strategies,
statistical arbitrage and credit.
Morgan Stanley is bullish on investors becoming increasingly familiar with absolute
return strategies. In turn, it is expected that more sophisticated alternatives
managers will continue to position themselves to offer UCITS compliant products to
investors.
14 UCITS Hedge Funds
MS PSAM Global Event UCITS Fund
Salar Convertible Absolute Return Fund
Indus Select Asia Pacific Fund
MS Algebris Global Financials UCITS Fund
Indus PacifiChoice Asia Fund
MS SOAM U.S. Financial Services UCITS Fund
MS Ascend UCITS Fund
MS Cohen & Steers Global Real Estate L/S Fund
MS Alkeon UCITS Fund
MS Perella Weinberg Partners Tkum Long/Short Healthcare UCITS Fund
RiverCrest European Equity Alpha Fund
MS Claritas Long Short Market Neutral UCITS Fund
MS Emerging Markets Fund
Alt-Era Fund
Morgan Stanley FundLogic Alternatives
UCITS Hedge Platform Survey 2012
T

Fig.4 Investment Region
Source: UCITS Hedge
Global Emerging 7.1%
Global All 50.0%
North America 14.3%
Asia All 14.3%
Europe All 7.1%
Latin America 7.1%
Fig.2 Liquidity
Source: UCITS Hedge
Daily 35.7%
Weekly 64.3%
Fig.3 Manager location
Source: UCITS Hedge
US 50.0%
Brazil 7.1%
Singapore 14.3%
London 28.6%
Fig.1 Investment Strategy
Source: UCITS Hedge
Long/Short
Equity 64.3%
Macro Systematic 7.1%
Event Driven 7.1%
Relative
Value 21.4%
U C I T S P L A T F O R M S U R V E Y
14
ollowing its acquisition by UBS, the Swiss-based investment bank,
the Luxembourg Financial Group alternative UCITS platform has been

expanded and rebranded as UBS Liquid Alpha. It includes funds domiciled
in Luxembourg, Ireland and Cayman. The acquisition in mid-2011 positions UBS
with an exceptionally broad platform, including a burgeoning alternative UCITS
business with nearly $200 million in AUM.
The integration of the legacy LFG and UBS business units presages a renewed
push into the alternatives and UCITS sectors later this year. The refocusing of the
UCITS strategy is expected to see additional managers and strategies joining the
platform.
The reconstituted UBS Liquid Alpha has deep expertise in tax and regulatory
structuring, providing integrated solutions for risk management, custody and
liquidity. The platform will increasingly host an array of diverse funds. The
expertise of the multi-skilled team spans Luxembourg, Ireland and offshore
jurisdictions, while extend to ETFs and a variety of structured products.
3 UCITS Hedge Funds
Act II Specialist Equities Fund
Sabre All Weather Fund
Indus Pan Asia Fund
UBS Liquid Alpha
UCITS Hedge Platform Survey 2012
F
Fig.4 Investment Region
Asia All 33.3%
North America 33.3%
Global Developed 33.3%
Source: UCITS Hedge
Fig.2 Liquidity
Daily
100%
Source: UCITS Hedge
Fig.3 Manager location

Source: UCITS Hedge
London 33.3%
New York 33.3%
Singapore 33.3%
Fig.1 Investment Strategy
Relative Value
33.3%
Long/Short Equity
66.7%
Source: UCITS Hedge
U C I T S P L A T F O R M S U R V E YU C I T S P L A T F O R M S U R V E Y
15
Matrix • SEB • Merchant • Montlake • GSI • Nomura
UCITS Hedge Platform Survey 2012
Matrix
From a mid-2010 launch Matrix has grown rapidly
to encompass four funds managing $175 million.
It uses an Irish-based umbrella company with
the investment products being sub funds in a
master/feeder structure.
“We follow a different model,” says Luke Reeves,
director, who is head of retail and institutional
business development.
“We are looking to have a partnership with
managers so we don’t look to have competing
strategies. We want to provide distribution for
managers and grow with them. It is more
of a two-way process than some of the other
platforms out there.“
For 2012, Matrix is looking at possible new funds

investing in commodities and macro. Forex is also
under consideration as it offers a return profile
uncorrelated to other asset classes.
4 UCITS Hedge Funds
Lazard Opportunities Fund
Cantab Quantitative UCITS Fund
Matrix Asia UCITS
Matrix New Europe UCITS Fund
Investment Strategy
Macro systematic
25%
Event driven
25%
Long/short equity
50%
SEB Prime
Solutions UCITS
SEB has been busy in recent months adding funds
to its Luxembourg SICAV platform, with assets
now touching about $75 million. The aim now is
to grow AUM for managers on the platform, while
considering managers with innovative equity
long/short and CTA strategies. These strategies
mesh with SEB’s experience and are the most
viable under UCITS rules.
Peter Herrlin, client executive for European hedge
funds with SEB’s prime brokerage unit and head
of sales for SEB’s Prime Solutions UCITS platform,
thinks most of the money for UCITS will continue
to come from institutional investors, but notes

that several of the funds on the SEB platform also
have retail share classes.
“We believe that there will be continued demand
for UCITS from both retail as well as institutional
investors,” says Herrlin. “The main drive is
towards onshore regulated funds at present.”
6 UCITS Hedge Funds
SAM Capital Equity Opportunity UCITS Fund
Fusion LIBOR+ 800 Currency UCITS Fund
RAB Prime Europe UCITS Fund
Vertex UCITS Fund
Conscendo Oil & Energy UCITS Fund
G&P Orca UCITS Fund
Investment Strategy
Long/Short Equity
66.7%
Macro Discretionary
16.7%
Multi-strategy
16.7%
Merchant Capital
Merchant Capital is returning to a more active
launch schedule in 2012 with the imminent
opening of a MLP (master limited partnership)
fund to be traded on the stock exchange as well
as an ETF offering.
With these funds AUM will hit about $125
million. The firm’s strategy is very much one
of targeting the retail market with alternative
UCITS products.

Overseas in Asia and South America the retail
UCITS market has taken off and it is expected
that the same phenomenon will occur in Europe.
George Cadbury, founder of Merchant Capital,
says retail investors need to be educated about
the advantages of alternative UCITS since hedge
funds are generally better risk mangers in down
or volatile markets.
Merchant has acquired a UK network of
independent financial advisers. That should help
get the message of alternative UCITS to a much
broader retail audience.
4 UCITS Hedge Funds
Merchant European Equity Fund
Merchant Global Resources UCITS Fund
Merchant Galaxy China Absolute Return
UCITS Fund
Russian Phoenix UCITS Fund
Investment Strategy
Long/Short Equity
100.0%
U C I T S P L A T F O R M S U R V E Y
16
Montlake UCITS
The Montlake UCITS platform is an Ireland-based
business run by ML Capital. The three initial funds
saw assets surge over 2011 and with two new
funds already announced to come on board in 2012
AUM has hit $100 million.
“Investors are starting 2012 with a positive view

and recognize the benefits of using alternative
strategies in a volatile environment,” says John
Lowry, co-founder and chairman of ML Capital.
MontLake has also made a distribution pact with
Acolin Fund Services of Zurich, which will provide
managers its platform access to several hundred
banking groups across the German and Swiss
marketplaces. Montlake is also looking to get
distribution with private banks in Latin America and
Asia where demand for alternative UCITS is high.
The MontLake UCITS Platform is in the process of
adding additional managers. Along with a concerted
effort in distribution, ML Capital is targeting a rise
in AUM to beyond $500 million later this year.
5 UCITS Hedge Funds
MontLake Pegasus UCITS Fund
MontLake Dunn WMA UCITS Fund
MontLake Skyline UCITS Fund
Montlake Goldwinds Global Macro UCITS Fund
Montlake RP Systematic Emerging Market
UCITS Fund
Goldman Sachs
International
Proof that the alternative UCITS market is
developing strong foundations came last summer
when Goldman Sachs launched a UCITS platform.
Each fund manager is able to trade its own
strategy, as set out in sub-fund documents, using
the infrastructure of the platform, including
independent service providers such as custodian,

administrator and auditor.
Goldman set up the platform after prime
brokerage client GLC inquired about setting up a
UCITS product. Goldman has run a UCITS business
since 2007 which has attracted over $3 billion in
assets, but only markets internal funds to external
investors.
In early 2012 Javelin Capital, a London-based
emerging markets equity hedge fund firm backed
by Majedie Investments, launched a UCITS version
of its fund on the Goldman platform. The launch
takes assets on the platform to around $100
million. Given Goldman’s appetite for growth, it
would seem that the UCITS platform is likely to
see rapid growth in the next few quarters.
3 UCITS Hedge Funds
GLC Gestalt UCITS Fund
GLC Global Macro UCITS Fund
Javelin Capital Emerging Markets Alpha Fund
Investment Strategy
Relative Value
33.3%
Long/Short Equity
33.3%
Macro Discretionary
33.3%
Nomura
Nomura is planning the launch of several funds
on its Enovara Irish-domiciled UCITS platform
during 2012. The first one is a Japanese focused

long/short equity strategy. The second one is a
global fixed income strategy.
“We don’t want to launch too many new
products,” says Florent Josset, head of Nomura
Alternative Investment Funds. The key is what
happens over the next three to six months
and what that does to investor behaviour. We
will want to stagger new launches based on
investor appetite. Volatile markets like this
make it impossible to plan.”
The chief characteristic of new UCITS is that
they will be mainly Asian-based managers
investing in Asian investments but distributed
globally. Among the products due to launch in
the second half are fixed income, credit and
equities funds. There is also the possibility of
a launch of an ex-Asia emerging markets fund
focusing on Eastern Europe, MENA and South
America.
4 UCITS Hedge Funds
IRIS
IRISx4
HFRq UCITS III Fund
Macro Commodity Strategy (“MaCS”) Fund
RQSI Global Asset Allocation Fund
Investment Strategy
Macro Systematic
100.0%
Investment Strategy
Relative Value

20.0%
Long/Short Equity
60.0%
Macro Systematic
20.0%
U C I T S P L A T F O R M S U R V E Y
17