|UBS’s new Wealth Management Hedge Fund platform seeks to not only help structure and diversify investment portfolios, but also aims to offer investors peace of mind.
While research has generally shown that hedge funds provide diversification and performance benefits to traditional investment portfolios, their value proposition may still be underappreciated by certain investors. Despite their low correlation to equity, interest rate and currency market movements, as well as their ability to preserve capital during market sell-offs, private investors remain wary. This is due in part to recent events such as the Madoff incident, which is perceived by many as an example of the hedge fund industry’s mismanagement of liquidity. Other factors that have dissuaded investors include the belief that large funds,
apart from being over-diversified and inflexible, often focus too much on brand-name managers; as well as the perceived lack of transparency and regulatory oversight.
To address these concerns, UBS Wealth Management has revamped its hedge fund services to introduce two new platforms. The first is the Hedge Fund Access platform that provides ultra high net worth clients with access to a range of pre-selected single manager hedge funds. Secondly, a new range of UCITS III-compliant single manager and multimanager hedge funds are available for those who prefer a framework closer to mutual funds with regulatory oversight,lower minimum investment requirements and potentially better liquidity.
In recent years, UCITS III version funds have been attracting investors for their wider range of investment opportunities and risk management capabilities, which include transparency and regulation. As a result, the UCITS III compliance stamp is now widely recognized as a benchmark of investor confidence.
Combined, these two platforms mean that UBS is among the industry leaders*, and can offer investors the following advantages: