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Tread carefully on Ucits III

Multi-manager round table: reports by Matt Goodburn

New Star head of investment fund of funds Mark Harris says multi-managers need to ensure they continue to meet investors’ requirements when applying some of the new more flexible powers and products available under Ucits III.

At a Money Marketing round table, he said the adoption of new powers such as shorting stocks and buying more offshore products, hedge funds and structured products will gradually increase but changes need to be made carefully.

Harris, who is already using a number of the more flexible techniques now available, said: “The regulators are allowing us more powers and I embrace that. In the past, I have been frustrated I could not do more for clients but we need to be careful we are not taking the funds away from what the client bought them for.”

“I expect to see existing funds move more towards some of the new products but a lot of them might be fool’s gold. Some people think that hedge funds are the panacea for everything.”

Jupiter director John Chatfeild-Roberts commented : “Ucits III has given us broader powers but most investors have bought funds of funds as core investments so we will not move our funds particularly quickly.”

Credit Suisse multi man-ager co-head Gary Potter described the process of adopting new processes as “evolution, not revolution”. He said: “The benefits of multi-manager is sold now. Let us push on and maybe include some of the new products but not mix up the message.”

Christows managing director Dan Kemp said: “A lot of funds of funds are running long-only and some are running a mix of fund and hedge. We are starting to scratch the surface but it is important that we do not destroy what we have built up.”

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