Relaxing the regulatory regime for retail investors

Alternative Investments

The FSA is to consult on the possibility of allowing funds-of-hedge funds to be marketed to retail investors, allowing them to access potentially lucrative investments in a lower-risk manner

Until now the regulatory regime in the UK has prevented the marketing of funds-of-hedge funds to the retail investor but things are slowly beginning to change. Because hedge funds have been perceived as a riskier asset class than fixed income or equities, ordinary investors have been prevented from investing in these vehicles. Until now hedge funds have primarily been the remit of institutional investors such as corporate pension and insurance funds, as well as very wealthy private investors. This perception is misguided in our view. All too often, the complexity of the product is confused...