France’s COB gives green light to hedge funds of funds
FRANCE – The fund of hedge fund market in France is expected to grow now that it is to receive formal regulation by the French regulator, Commission des Operations de Bourse (COB).
Following a 15-month consultation period, the COB has set out a regulatory framework for fund of hedge fund investing, and the recommendations will be formalised into regulations over the next few months.
Bernard Dennery, French delegate of the Investment Managers Association (IMA), and managing director of BNP Paribas Fauchier Partners believes that the move by the COB will have a positive effect on the fund of hedge funds market in France. “Although the recommendations were there informally before, now that the COB has put down something formal, it is confirmation to the market that the need for alternative investments has now been recognised.”
“Previously there were restraints regarding liquidity and valuations, but now the fund of hedge fund business has been put in line with the general practice of other investments,” added Dennery.
There are currently around 42 fund of hedge funds in the French market, managing around three billion euros in assets. It is now widely believed that the recognition of the asset class by the COB will result in more business, and encourage others to enter the market.