LONDON (HedgeWorld.com)–The latest offering from UBS Warburg combines the structure of a hedge fund-linked certificate with the S&P Hedge Fund Index, which PlusFunds offers in an investable format.
Germany is the first country in which the firm plans to offer the new hedge fund certificates. UBS Warburg announced that it was offering investment certificates issued by UBS Warburg AG in Frankfurt, a subsidiary of UBS AG.
As the certificates are offered in lots of 10,000 euros and US$10,000, it marks the first time the S&P Hedge Fund Index/PlusFunds portfolio has been offered in both euro- and dollar-denominated shares. Certificates are the hedge fund offering of choice due to heavy taxation of foreign funds and strict regulation of domestic funds in Germany. Approximately 16 billion euros have been invested in hedge fund-linked certificates so far.
UBS Warburg officials are in the process of getting approval to offer certificates in Germany, but eventually the company plans to sell certificates throughout Europe, Asia and Latin America. As currently structured, the certificate offers the holder a bearer note on a major European stock exchange and is traded in a regulated market. The certificates can be settles via Euroclear or Clearstream settlement services.
“As a conservative financial institution, we value the brand recognition of Standard & Poor’s, along with the transparency and risk control measures that they have put in place for this index,” said Helmut Fischer, executive director for UBS Warburg London.