Hedge fund experts have heralded as a 'fundamental step' rules introduced in mid-May in Italy to halve the minimum investment in onshore hedge funds to E500,000.
Alberto La Rocca, chief investment officer of Pioneer Alternative Investments, said the rules from Italy's Central Bank represented a 'fundamental step into a more mass affluent type of industry rather than limiting to the high net worth industry' in Italy.
While La Rocca said the minimum would still be too high for many retail investors, he added the lowering was a 'step in the right direction.'
'Because of the nature of the (hedge fund) business it is a good move for all the players...to stick at least to the affluent type of investor if not with high net worth.'
Italy's first onshore regulated hedge fund was launched nearly two years after a Ministry of Finance decree in May 1999 made them legal, and appointed both the Bank of Italy and national depository Consorb as regulators.
La Rocca added he expected to see a co-ordinated approach by the various Central Banks in European jurisdictions 'for the common regulation of hedge funds.'
Dublin-based Pioneer Alternative Investments forms part of the Pioneer Group, which is overseen by Italian parent firm UniCredito Italiano. Pioneer's purchase last year of London's Momentum Asset Management expanded its operations into funds of hedge funds, which La Rocca said were already offered to individuals mainly through private banking channels.
'In Ireland the hedge fund industry has a E250,000 minimum, while retail funds of hedge funds have a minimum of E12,500 and any structure with a capital guarantee has (no) minimum,' he said.
However La Rocca said he did not feel hedge funds would ever become an easy product for the retail market, and he added it was in the industry's interests not to lose focus on product performance with the opening of new potential consumer markets.
'Performance production is about exploiting arbitrage opportunities in the market that would by definition not be there if we had to put a huge amount of capital to work.'
La Rocca added he still expected a major growth area for hedge funds to be institutional investors, 'who will enter seriously into this area in the next few years.'
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