ubs receives regulatory approval to launch into the italian market
UBS is to add a fund of hedge funds for Italian investors after launching one for German buyers in April.
UBS has received regulatory approval for the separate hedge fund management company it had to establish for the Italian market, and plans to launch the fund itself in the coming two months.
The launches, along with its existing French targeted fund of hedge funds (FoHF), represent a major pan-European effort by UBS, whose German FoHF – Dach-Hedgefonds UBS Hedge Fund – Global Strategies – will be available to retail and private banking clients.
The Italian FoHF uses the expertise of local staff. The German equivalent will use UBS firm O'Connor in manager selection, and will be a similar mix to that of O'Connor's existing Proprietary Series III.
"We are going to invest via our onshore FoHF vehicle into existing master funds in the Caymans," explained Frank Schäfer, UBS Global Asset Management's head of product development and management.
UBS's German operations will ensure the funds satisfy German tax transparency. Complying with German law the FoHF will not use leverage.
"In the retail market it is mostly about education," Schäfer said, "and the first investment step will be through FoHFs. We agree with the recent Mercer Oliver Wyman survey that said the major growth will come from high net worth and private banking."
Schäfer added the tax transparency process was "quite complex for offshore administrators moving from the daily liquidity as private banks were used to monthly or quarterly liquidity." Schäfer said UBS considered establishing a fund in Luxembourg for German distribution, however, German stipulations would add three months to the set-up process for Germany "and time to market is key for us. Also if you can say it is a German fund, certain German investors prefer that."
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