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‘Investors need hedge guidance’

Cazenove head of multi-manager Marcus Brookes says the FSA must ensure retail investors have appropriate guidance if they are given full access to hedge funds.

Speaking at Money Marketing’s multi-manager conference in Bristol last week, he said: “Whether you know what is going on and whether the provider is one of the best is important and there is no guidance and no education for that.”

Brookes pointed to the growth of absolute return funds in an open-ended form under Ucits III, saying the FSA has indicated that it is happy with the structures without explicitly endorsing them.

He said: “BlackRock UK absolute alpha has added £800m in five months, indicating how many people are buying this. The question is how much due diligence is being done on what is effectively a market-neutral hedge fund? Are they recognising Mark Lyttleton for the good manager he is or chasing performance? That is where guidance and education come in.”

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