Etheios welcomed the introduction of regulation for onshore retail funds of hedge funds (FoHFs) following the FSA’s draft proposals to widen their availability to mainstream UK investors.
At the end of March, the FSA called for an increase in the 20 percent investment restriction on funds investing in hedge funds that it has had until now.
This expansion of a regulatory framework for onshore funds of hedge funds in the UK would allow marketing not only to professional investors, but also to retail investors, Etheios said.
“Whilst it is acceptable for the industry to market to professional and sophisticated investors under the current relaxed regime, if the market is to become more mainstream, then greater regulatory oversight is required,” said Mark Seaman, principal consultant at Etheios. “These funds have to be regulated if their innovative investment approaches are to be offered to a broader range of investors – in a recent survey, less than 20 percent of affluent investors claimed to understand hedge funds. The changes will allow financial institutions to offer these funds and we at Etheios are ready to assist in their development.”