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July 31, 2006 at 08:00 PM
MADRID, Spain (HedgeWorld.com)–The Comisi’n Nacional del Mercado de Valores, Spain’s market regulator, is reported to have date-registered three asset managers who will thus be allowed to set up single hedge funds and funds of hedge funds. A total of 16 entities have requested registration–all major domestic institutions–and it is expected that the other 13 will be approved after the August holiday period.
The regulator has not named the funds that have already been registered, but one is believed to be managed by Optimal Investment Services, part of Grupo Santander, and one by BBVA, either via its joint venture with hedge fund veteran Vega Asset Management or through majority-owned Altitude Investments.
Since a rule change earlier this year allowing retail investors access to hedge fund investments via funds of funds, investment houses have been scrambling to develop their own products or to have access to funds developed by third parties that they can offer to clients using their own branding and marketing. The memorandum submitted to the regulator must contain strict resource specifications on the suitability of the fund’s staff, the adequacy of its information technology and its due diligence capacity.
However, noted Ivan Poza, managing director of the Spanish arm of Swiss fund of funds manager Harcourt, the approved asset managers will not be able to file their fund memoranda yet since some details still have to be ironed out. The CNMV is currently preparing its recommendations on issues concerning subscription, redemption and required notice periods as well as liquidity. These recommendations will then need to be examined and approved by Parliament and by the minister of the economy. A new law outlining the requirements in these areas is expected sometime in September or October. Once this has happened, asset managers will make an electronic filing of their fund memoranda, which will then need regulatory approval.
Mr. Poza said that only a handful of the asset managers undergoing registration–BBVA and Santander and maybe one or two others–have their own in house hedge fund capabilities or the resources to develop them. He said the majority would therefore look to external advisory services to help them set up their own domestic funds and funds of funds, which they would then market and distribute through their own channels.
