UK wealth manager Rothschild has emerged as the most high-profile supporter of a new European funds venture hoping to tap into the demand for more liquid, tighter-regulated hedge funds.
Banque Privée Edmond de Rothschild, a Luxembourg arm of the family wealth-management empire, is the biggest name involved in the Next Generation Absolute Return platform, which has been set up by Switzerland-based Decision Analytics Advisory Partners and will offer built-to-order absolute-return strategies from as many as 12 underlying investment managers.
Decision Analytics' venture brings together several European asset management firms, besides Rothschild. These are Luxembourg-based Lemanik Asset Management; the Swiss firms Secquaero Advisors and Plexus Investments; and German-based fund manager Acatis Investments. All will comply with the EU's Ucits rules.
Fred Sage, managing partner of Decision Analytics, said in a statement: "Our combined expertise provides the investor with the benefits of pre-screened, hard to identify managers who bring excellent strategies, skill, track records and the required capacity".
Advising on the platform is Bob Friedman, who built a similar operation for American Express Bank's wealth business in the early 2000s.
The new venture is tapping into a theme that has been keeping the hedge funds industry busy in recent months. Several managers such as Brevan Howard, BlueCrest, Marshall Wace and Veritas Asset Management have launched Ucits-compliant versions of their strategies.
Other firms, notably Schroders' subsidiary NewFinance Capital, have also recently launched fund platforms. Meanwhile, companies such as 3A Asset Management have begun marketing 'funds-of-Ucits-compliant-hedge-funds'.
The EU's Ucits III rules set minimum standards on liquidity, transparency and risk management, and allow managers to market themselves to "non-sophisticated” investors.