FSA warns on challenges facing 'hedge fund lite' providers

Speaking at the McKinsey Asset Management Conference, Dan Waters, director, conduct risk, and asset management sector leader at the FSA, says the regulator has observed the huge interest in the absolute return sector from providers and advisers alike. However, he says there could be challenges ahead, especially for providers such as hedge fund managers keen to jump on the “UCITs III bandwagon”. “We would remind new UCITs managers that compliance with the UCITs framework will take considerable investment in systems and controls, and while asset managers may delegate various functions,...