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Overview of 2010 Key Trends in UCITS III Hedge Funds


The phenomenal growth in UCITS III hedge funds1 over the last few years has been one of the most interesting developments in the global alternative investment sector. Currently, the Eurekahedge UCITS III Hedge Fund Database lists 7752 UCITS III products, with another 500 to be added in the coming months. Furthermore, the Eurekahedge UCITS Hedge Fund Index, the industry benchmark and most widely used tracker in the sector, consolidates the monthly performance of 236 funds.

Utilising data from the Eurekahedge UCITS Hedge Fund Database, this report picks up from our introductory piece in March 2010 and analyses the key trends emerging from the UCITS III hedge fund sector over the last few years. For a more detailed introduction on the unique features of UCITS III regulations and fund structure, please refer to our previous report3.

Figure 1 shows the growth in UCITS III hedge funds in the last three years.

Figure 1: Industry Growth over the Years

Click on the image for an enlarged preview

The size of the global UCITS III hedge fund industry currently stands at US$131 billion, managed by 615 unique4 (flagship) funds. Given the rapidly changing dynamics of the industry, we predict this number to continue growing at a rapid pace. An important point to note here is that most of the growth in the UCITS III industry comes not from new boutique fund start-ups but from the following three segments:

  1. UCITS III funds launched by existing hedge fund management companies. In the post-financial crisis environment where issues of regulations, transparency and liquidity have taken centre stage, existing hedge fund managers have identified the UCITS structure as a key to raising assets. Additionally…


The full article is available in the EH Report. 


1 In this report, we include funds employing absolute return strategies with a hedge fund-like structure.

2 As of August 2010.

4 As opposed to multiple share classes, currency denominations and suchlike.