October 27, 2010 / 11:13 PM / 10 years ago

UK's Bluecrest to shut $630 mln Ucits hedge fund

* $630 mln fund did not track parent fund sufficiently

* Blow to growth of EU-based Ucits hedge funds

* Fund to close at the end of November

LONDON, Oct 27 (Reuters) - Bluecrest Capital, one of Europe’s biggest hedge fund companies, said on Wednesday it would close a $630 million EU-regulated fund, dealing a blow to the recent boom in onshore hedge fund portfolios.

The company will close the Bluetrend Ucits fund, a computer-driven fund that latches onto market trends, because of its inability to replicate sufficiently the performance of the main offshore Bluetrend fund, according to an investor letter seen by Reuters.

Bluecrest confirmed the fund closure in a statement and said it planned to give investors other options for their cash.

Assets in Ucits-compliant hedge funds have doubled to $90 billion in the last year, as investors have sought out more regulated and transparent products in the wake of the credit crisis and the Bernard Madoff fraud.

However, some commentators have questioned whether Ucits’ restrictions on investment and liquidity would hurt returns and limit the funds’ ability to mirror less regulated offshore hedge funds. [ID:nLDE6811KJ]

Bluetrend, headed by Leda Braga, was one of the top-performing hedge funds during the financial crisis in 2008.

"It is anticipated, based on analysis by the investment manager ... that this tracking error may increase further in the current economic conditions," the letter to investors said. The fund is set to be liquidated at the end of November. (To read the Reuters Funds Blog click on blogs.reuters.com/fundshub; for the Global Investing Blog click here) (Reporting by Laurence Fletcher)

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below