Are Hedge-Fund UCITS the Cure-All?

Are Hedge-Fund UCITS the Cure-All? — March 2010

Executive Summary

suggests improved regulation of investment funds and properly designed incentives: incentives to invest in illiquid assets could be designed in regulated closed funds with a fixed horizon; incentives to adopt the AIFMD must be given by modifying the regulation of European institutional investors and authorising them to invest directly in funds that comply with the AIFMD; incentives to manage rather than to insure non-financial risks must be given by defining the responsibilities of distributors, asset managers, depositaries, and valuators and requiring them to hold the adequate regulatory capital. Yet the AIFMD proposal and the consultation on the UCITS depositary have failed to raise the question of capital requirements.

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An EDHEC Risk Institute Publication