Fund of hedge funds manager 3A is meeting demand for greater liquidity and transparency with a Ucits III fund of hedge fund.
The firm believes the Ucits III structure provides a solution to the potential problems of traditional hedge funds such as limited transparency, illiquidity and a lack of regulation, which investors felt more keenly in the aftermath of the credit crunch.
3A dynamic Ucits III aims for returns of 6-8 per cent a year, with low volatility. It will invest in a diverse portfolio of 25 to 30 Ucits III-compliant hedge funds which will follow more liquid strategies such as macro, commodity trading advisor programs, credit, market-neutral and long/short equity.
The fund will provide fortnightly liquidity and its underlying funds must comply with strict guidelines for diversification and risk control. They must also meet high standards of disclosure, particularly in terms of investment policy.