07/07/2010 Author: Elana Margulies

Natixis ready to launch new Ucits III platform

Natixis, the French banking titan, is poised to debut a new Ucits III platform as it relaunches its former managed accounts platform as a vehicle for Ucits-compliant hedge funds, HFMWeek can exclusively reveal.

The bank has remodelled Sixtina, once the home of over 30 managed accounts, to cater for so-called ‘Newcits’ funds and is due to unveil its first Ucits manager within the next few weeks.

According to internal sources, Natixis expects to raise €350m-€500m (633m) for the new-look Sixtina within its first year of operation. As it builds out its Ucits expertise, the bank is also planning to launch a Ucits III fund of hedge funds (FoHF) offering.

Natixis  has been developing its ‘Newcits’ platform since late last year, as it seeks to compete with the similar products of other large European and US banks. It will host the funds within its Luxembourg Sicav, and launch each with €20m-€30m (37m) of client money, with no initial internal investment from Natixis.

The remodelled and relaunched Sixtina already hosts six new funds, including a number of funds launched by a Hong Kong seeding firm. While the first Ucits III launch will be in July, six to seven more are anticipated before year-end, operating a diverse range of strategies, including long/short, CTAs and event-driven portfolios.

The original iteration of Sixtina struggled during the financial crisis, with investors redeeming the majority of assets, forcing the liquidation of the funds. The relaunched version hopes to build on current demand for hedge fund-style Ucits, particularly among European institutional investors. 

The €3.4bn ($4.3bn) alternative investments group will also be responsible for launching the Ucits FoHF offering later this summer. According to a spokesperson, the new fund may well allocate to the platform’s initial crop of Ucits III managers, as it builds a portfolio of underlying funds. Aiming to create an initial basket of ten managers, the FoHF will also invest in Ucits funds that do not sit on the Natixis platform.

The hedge fund-style Ucits III boom, which started in late 2008 after the Lehman Brothers bankruptcy, has gained traction amid investor demands for more regulated, transparent and liquid offerings. Initially, the race to launch these onshore vehicles was more prevalent among European hedge fund managers, familiar with Ucits III structures and EU funds regulation.

However, over the past several months, US hedge fund managers, hungry for European investor capital and nervous of the anti-marketing stipulations contained in the proposed AIFM Directive, have joined the fray, rolling out Ucits III-compliant versions of their flagship strategies.

Despite the fact that the number of hedge fund managers worldwide launching Ucits-compliant offerings is skyrocketing, the industry still has some reservations about them.

Last month at Gaim International in Monte Carlo, one of the biggest industry conferences, regulators, among other executives, discussed the negative implications of these structures. Delegates were warned that these structures are not suited to all types of hedge fund strategies and still have the ability to lock up investor money.