Top five absolute return fund platforms near $8bn assets

The importance of fund platforms to European investors in Ucits-compliant hedge funds has been shown by the fact the five largest platforms for such products have almost $8bn of assets on them.

This was nearly 10% of all Ucits absolute return fund assets as at June 2011, when the reading was taken.

The largest portion of the $7.82bn total for platforms was held on Merrill Lynch Investment Services ($2.3bn), followed by Deutsche Bank’s Platinum platform ($2.1bn), Aquila Capital’s Alceda platform with $1.7bn, Schroders with $977m on its GAIA platform, and Frankfurt’s Universal Investments, with assets of $772m.

The importance of platforms to fund managers is demonstrated by the fact all these assets are shared between 38 funds, according to data monitor and publisher HedgeFund Intelligence.

HFI said European equity strategies dominate Ucits platforms by strategy, and predicted platform assets would grow “in line with the wider absolute return Ucits sector”.

“Platforms are particularly attractive to hedge funds that do not have extensive distribution networks and infrastructure teams of their own. The majority of the Ucits platforms were launched in the aftermath the global financial crisis in 2008.

“Since inception, the platform industry has developed into a one-stop-shop solution, offering traditional offshore alpha generators access to fund governance, administration and custody services. Most platforms also offer capital raising capabilities.”

The largest absolute return Ucits fund represented on a platform was the $1.3bn DB Platinum IV dbX Systematic Alpha Index fund, a computer-driven strategy that uses the Diversified Trading Program of London’s Winton Capital Management.
Aquila Capital’s AC Risk Parity 7 Vol fund, with $1.1bn, was the only other Ucits fund on a platform with assets topping $1bn.


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