UK - The London Stock Exchange is launching a dedicated market for issuers of specialist funds to fill a gap in the burgeoning growth of the alternative investments sector.
Called the Specialist Fund Market, the new regulated market will take listings from November 2007 and fills a regulatory listings gap between the Alternative Investment Market (AIM) and the main LSE when the Financial Services Authority's new Unitary Regime is introduced, as it will allow the development of single strategy hedge funds and private equity vehicles.
This should give pension funds "a clearly-labelled market" for institutional investor funds, such as hedge funds, real estate and private equity funds, according to Martin Graham, director of markets at the London Stock Exchange, which would, until now, have required a full stock market listing through the main LSE market or AIM.
Funds will be regulated according to all relevant EU Directives and the market is open to UK and international fund listings.
Equally important, these specialist funds will not be listed within the main FSTE UK indices series and will therefore not need to be considered as potential investments for index tracker funds.
Nigel Farr, partner at Herbert Smith LLP, believes thE LSE launch is "a positive and pragmatic step forward".
"It recognises that there will be managers proposing to launch private equity funds, hedge funds and funds of hedge funds who wish to access the highly liquid London markets but need the regulatory flexibility that the EU standards allow, and that there will be institutional and professional investors willing to invest on this basis," said Farr.