Boom in Ucits hedge funds helps London keep the edge

Michael Bow
Follow Michael
LONDON has retained its crown as the hedge fund centre of Europe after a surge in EU-compliant fund launches helped prop up the capital’s dominance of the sector, a new report shows.

London accounted for 18 per cent of the $2 trillion (£1.3 trillion) of hedge fund assets managed around the world for 2012, compared to 21 per cent for Europe as a whole, according to TheCityUK.

A boom in the launch of so called Ucits-compliant hedge funds – which are onshore funds regulated by the EU – has helped London maintain pre-eminence, with 74 per cent of Ucits assets based in the UK compared to 10 per cent for second place France.

The growth means there are now over 600 hedge funds operating in London alone, helping employ around 40,000 people across the country.

Hedge fund launches have been slowly ticking up since 2009, helped in part by Ucits fund reforms, although they are still off the peaks seen before the financial crisis and the rate of liquidations remains the same

Overall New York is still the hub of the global hedge fund industry, with 42 per cent managed from the Big Apple despite a fall from 50 per cent a decade ago.

London’s share of the global market has increased from 10 per cent over the same period.