TOP 10 UCITS PLATFORMS 2018

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1 TOP 1 Large Ucits funds fuel strong growth as Universal-Investment takes top spot BY SAM MACDONALD 16 HFMWEEK.COM UCITS PLATFORMS 218 The 12 months to the end of October 21 were largely positive for the Ucits platform world with all but one of the top 1 participants posting increases in their overall Ucits AuM. Ucits platform assets rose 18% over the year, jumping to $35.1bn, from $29.bn in October 216. The Absolute Ucits Single Manager Composite Index advanced.% over the same period, compared to a.8% drop in the previous year. Platforms are highlighting private banks and wealth managers across a variety of European countries as their main source of inflows, with distribution predictably pointed to as the most important platform capability for managers seeking an umbrella. Among the smaller platforms not to make the top 1 were Trium Capital s $28m umbrella, investor group Tages $3m offering and UBP s $6m U Access business. German asset house Universal-Investment topped the rankings after a year in which it boosted assets to $bn, rising 32% over the year from $5.3bn with the net addition of one fund onto its platform, taking its total to 53. The largest funds on the Universal-Investment platform include the $1.8bn Acatis-Gané Value Event funds, the $1.2bn XAIA credit funds and the $61m RP Gamma portfolio. Demand for non-plain vanilla strategies, such as negative and positive basis trades, alternative fixed income and value event concepts, has increased noticeably. The bulk of the total AuM in alternative Ucits is held by private banks and wealth managers, and some sort of institutional type investors. From a geographical standpoint, Universal-Investment s investor base is mostly European, with focus on continental Europe, in particular Germany, Austria and Switzerland, says Universal-Investment head of sales Wilhelm Gold. Second-placed Bank of America Merrill Lynch saw fund levels remain flatover the year but increased assets by 19% to $6.5bn, thanks to strong increases in its largest fund, the AQR Global Relative Value Ucits, which saw AuM rise 21% to $1.8bn, up from $1.5bn. It has been an interesting period for the Baml Ucits offering, as a number of funds, including the Beach Point Credit Ucits and the Och Ziff European multistrat, have shuttered. Director and platform boss James Munce left Baml in April last year to become COO of global asset firm Fidante Partners. The bank has reduced its fund count since the end of October, with the closures of the Fenician Equity Long Short Ucits Fund, the Passport Capital Global Equity Long Short Ucits and Columbus Circle s CCI Healthcare Long-Short Ucits Fund. Third-placed Schroders Gaia platform increased AuM by 18% to $5.9bn, thanks to large increases in assets in its $1.5bn Schroder Gaia Two Sigma Diversified, the $1.2bn Schroder Gaia Cat Bond fund and the $1.6bn Schroder Gaia Egerton Equity fund. John Paulson s Schroder Gaia Merger Arbitrage fund has suffered a difficult year with assets plunging 8% down to $92m, falling from $52m last year and down from a high of $1.2bn in August 215. Performance saw the fund fall 2% last year and 2% in 216. Some of the most popular strategies have been Asian equity L/S, EMD absolute return, Global Multi Credit, European Credit L/S and Quant Multi Strat. We continued to see strong demand across most European markets in particular Switzerland, France, Spain, Germany, Italy, UK and Luxembourg as well as increasing demand in the US offshore market, Brazil, Korea and Japan, Schroders head of alternative Ucits Andrew Dreaneen says. DEMAND FOR NON-PLAIN VANILLA STRATEGIES, SUCH AS NEGATIVE AND POSITIVE BASIS TRADES, ALTERNATIVE FIXED INCOME AND VALUE EVENT CONCEPTS, HAS INCREASED NOTICEABLY Boston-headquartered Wellington Management is currently launching a multi-strategy Ucits fund on Gaia. Wellington, which runs over $1trn total assets and $bn in alternatives, is launching a Ucits version of its $2bn Pagosa offering, investing across nine strategies. Irish platform MontLake has moved into joint fourth JAN 218

2 1 9 29% Goldman Sachs HEDGE FUND UCITS AuM $8m 8 Goldman has increased AuM by 29% over 12 months and added four funds over the same period. Two Aberdeen funds were added across the year: the Aberdeen Alternative Risk Premia Enhanced and the Aberdeen Alternative Risk Premia funds. However, the four existing funds, the LBN China+ Opportunity, Maverick Fundamental Quant, MSK Equity and Select Equity Long/Short all saw double-digit falls in assets in the year to October end. Goldman Ucits platform executive director Neha Jain left in October to join Deutsche Bank. 1% Alpha Ucits HEDGE FUND UCITS AuM $8m 2-1 Former Brevan Howard partner Stephane Diederich s Alpha Ucits platform has enjoyed a solid 12 months with assets more than doubling on its platform, largely due to the Fair Oaks Dynamic Credit Fund. The Fair Oaks fund has been dubbed the first CLO Ucits, with assets in the strategy rising from $139.9m at the end of October 216 to $516m this year. The Alpha Ucits Amber Equity Fund AuM was up 55% over the year, rising to $32m from $28m. The platform saw a net reduction of one fund following the closure of the Anavon Equity Long/Short Fund. TOP 5 BY PERCENTAGE GROWTH ALPHA UCITS 1% UNIVERSAL- INVESTMENT 32% GOLDMAN SACHS 29% MONTLAKE 26% 19% 8 15% Rothschild/Innocap HEDGE FUND UCITS AuM $2.1bn Innocap has boosted its assets by 15% largely thanks to a 6% increase in AuM in the CFM Diversified Fund to $1.1bn, up from $m 12 months prior. Funds stayed flat at four over the year to the end of October. Other funds on the platform are the $68m R Parus Fund the $19m CFM Trends Fund and the $m Karya Macro Fund. The CFM Trends Fund was launched in December 216 while the $2m BlackRock Select Fund, held on the platform since April 2, was liquidated in the second quarter last year. The Ireland-domiciled fund launched with $82m. -32% Deutsche Bank HEDGE FUND UCITS AuM $2.3bn 9 The only participant this year to have seen a fall in Ucits assets with AuM dropping by almost a third to $2.3bn, down from $3.bn last time and pushing it to sixth spot, down from fourth place last year. Assets in its Winton-based DB Platinum IV Systematic Alpha Ucits have dropped 32% to $1.bn, down from $2bn last time round, while the DB Platinum Clinton Equity Strategies now has AuM of $63.5m, dropping 89% from $595m in October 216. In October, HFMWeek revealed that DB had hired Goldman Sachs platform executive director Neha Jain in a senior role on its Ucits offering JAN 218 HFMWEEK.COM 1

3 6 Lyxor HEDGE FUND UCITS AuM $3bn 15% The French asset manager has made a net addition of four funds over the last year and boosted assets by 15% to $3bn, moving it up one spot in the top 1 to fifth place. In March last year, Wells Fargo Asset Management (WFAM) teamed up with Lyxor to launch a financial credit fund to focus on European debt. Lyxor has increased its focus on Ucits and in December it emerged that it had closed a number of Jersey offshore funds as part of its strategic goal of refocusing its multi-management expertise and resources on the alts Ucits space. The firm is seeking to double its alt Ucits AuM over the next five years. UNIVERSAL- INVESTMENT TOP 5 $1.bn $1bn BY $ GROWTH = Morgan Stanley HEDGE FUND UCITS AuM $3.bn 28% -5 SCHRODER GAIA $922m The investment bank has moved up from joint-sixth in last year s study after boosting assets by 28% to $3.bn, up from $2.6bn at the end of October 216. The platform saw a net reduction of five funds over the year, with closures including the Mariner Investment Diversifying Alternative fund and the MS Broadmark Tactical Plus portfolio. In June, London-based market neutral CZ Capital has launched a Ucits version of its flagship fund on the FundLogic platform. The IPM Systematic Macro fund increased assets by 6% over the year with assets rising to $1.bn, up from $81m 12 months prior. = MontLake HEDGE FUND UCITS AuM $3.bn 26% 33 The Irish platform moves up one place into joint-fourth spot after another solid year of growth with assets up 26% over the year and the net addition of seven funds over the period. Assets have now risen to $3.bn and its fund count reached 33 at the end of October with one highlight seen in October in the form of $9bn New York-based Advent Capital s Advent Global Partners Ucits Fund, which is now at $1m. In May, US subordinated debt specialist Spectrum Asset Management launched the High Ridge Credit Opportunities Ucits fund on the umbrella and in April, global long/short equity manager Ronit Capital launched an emerging markets focused-ucits fund. MORGAN STANLEY $6m ALPHA UCITS $92m spot alongside Morgan Stanley after boosting Ucits assets by 26% to $3.bn, up from $2.bn in the last study. The firm says managers are increasingly realising the benefits of a Ucits offering in tapping into European investors and adds that the popularity of credit Ucits is on the rise. An interesting development has been the rise in prominence of alternative fixed income strategies, something that hasn t really been the case in the Ucits space before. Alternative fixed income has been very successful in attracting assets in 21 and we expect this trend to continue, says ML Capital CEO Cyril Delamare. French asset manager Lyxor enjoyed a 15% boost in numbers with assets rising to $3bn and the net addition of four funds over the year and notable growth in its Capricorn GEM Strategy fund, the Tiedemann Arbitrage Strategy fund and the Chenavari Credit fund. RATIONALE This survey does not aspire to cover the entire Ucits hedge fund sector, just those held at the top 1 largest Ucits platforms. To be eligible, a platform must have at least one externally managed fund. HFMWeek s definition of hedge fund Ucits excludes 13/3 funds and external ETFs. AuM details included are as of the end of October HFMWEEK.COM JAN 218

4 Lyxor deputy head of hedge fund selection Moez Bousarsar says managers who are offering daily liquidity and early-investor incentives on their Ucits funds are in the best position to prosper in the space. In general the distribution of products remains the key factor of relationships. There is a goal to reach the $1m threshold quickly. In order to achieve that goal we see managers more inclined to offer founder share classes and discounted fees. We have seen across the platform daily liquidity is more and more popular and we think it is creating strong calls for asset raising by managers going forward, says Bousarsar. Deutsche Bank was hit by a 32% drop in its hedge fund Ucits AuM with assets dropping to $2.3bn down from $3.bn a year prior. The bank saw significant drops in assets from its Platinum DB Platinum Clinton Equity Strategies, which plunged to $63.5m down from $595m a year earlier, and the DB Platinum IV Systematic Alpha, which saw assets drop 32% to $1.bn, down from $2bn in 216. Ninth-placed Alpha Ucits achieved 1% growth over the year, with AuM rising to $8m from $38m, driven by a large increase in its Fair Oaks Dynamic Credit Fund, which the firm has dubbed the first CLO Ucits. Alpha Ucits net fund tally dropped down from three to two, following the closure of the Anavon Equity Long/Short Fund. CEO Stephane Diederich says: It has been an excellent year for asset raising in general. Alpha Ucits has raised assets from most European regions and also in Asia. We have not really seen outflows. AN ALTERNATIVE TO PLATFORMS? Alongside Ucits platforms, Ucits multi-manager funds are another way for managers to look to tap into the Ucits growth strategy. Below we set out the top five umbrella funds and the underlying managers they allocate to. 3 Another year of steady growth posted by Schroders with an 18% increase in AuM over 12 months, aided by Two Sigma s successful launch on the platform last year. Four out of the seven funds on Gaia are in excess of $1bn and three of those saw increases in assets over 12 months. London-based Egerton Capital s fund grew 2% over the period, from $1.3bn to $1.6bn. In February, Schroders hard-closed the Two Sigma Diversified Ucits to new assets as the fund hit its $1.5bn capacity just six months after launch. Total net funds were down one and there were two closures on the platform over the last 12 months in the form of the Schroder Gaia BSP Credit portfolio as well as the Schroder Gaia Conatus Equity, which shuttered as the $1.9bn Greenwich, Connecticut-based manager closed down in October. 2 Schroder Gaia HEDGE FUND UCITS AuM $5.9bn 18% -1 Baml HEDGE FUND UCITS AuM $6.5bn 19% Baml has boosted assets by 19% despite seeing total fund numbers stay flat over the year to the end of October. There were also some closures around the end of 21. Over the 12 months there has been a fair amount of movement on its Ucits offering, with the shuttering of the Beach Point Credit Ucits and the Och Ziff European multi-strat portfolio as well as the Theorema L/S fund exiting the umbrella. Asset growth has been driven by the largest funds on the platform, notably Marshall Wace ($3.5bn), and AQR ($1.8bn). In April, director and platform boss James Munce departed the bank to join global asset manager Fidante Partners as COO. In January 21, US quant manager Millburn Ridgefield Corporation launched a Ucits version of its flagship Millburn Diversified Program. TOP FIVE MULTI-MANAGER ALT UCITS FUNDS AND SELECTED UNDERLYING MANAGERS SOURCE: MORNINGSTAR AND FE ANALYTICS BLACKSTONE DIVERSIFIED MULTI- STRATEGY FUND $2.1BN GSIS, HealthCor, Cerebellum, Two Sigma Advisers 3% IPM, Emso, GSA, H2, BAIA- Direct, DE Shaw 8% Chatham, Cerberus, Bayview, Caspian, Good Hill, Sorin, Waterfall 18% FRANKLIN K2 ALTERNATIVE STRATEGIES FUND $1.8BN Chatham Asset Management 11.5% P. Schoenfeld Asset Management 1.% Loomis Sayles & Company 9% Portland Hill Asset Management 8.1% Chilton Investment Company 8% CAIXABANK SELECCIÓN RETORNO ABSOLUTO ESTANDAR (UCITS) $1.BN Gam Abs Ret Bd Plus.9% Henderson Gart Uk Abs Return.8% Standard Lf-Glob Abs Re-Dia 6.8% Pictet Tot Ret-Agora-Ieur 6.3% Bny Mellon Abs Ret Eq-Eur-Uh 5.9% GOLDMAN SACHS GLOBAL MULTI-MANAGER ALTERNATIVES PORTFOLIO $851M Acadian Asset Management 13.3% Brigade Capital Management 11.% Sirios Capital Management 9.2% Wellington Management Company 8.3% ADG Capital Management 8.1% PICTET SELECT - GLOBAL LONG/ SHORT EQUITY (UCITS) $511M MLIS MW TOPS Market Neutral 1% Select Equity L/S 9.% Schroder GAIA Egerton 9.5% Alken FS Absolute Return Europe 9.2% DB Platinum Chilton European Equities 8.% JAN 218 HFMWEEK.COM 19

5 1 TOP % Universal-Investment HEDGE FUND UCITS AuM $bn 53 TOP 1 TABLE TOPPERS & GROUP AuM 1 After three consecutive years of falling assets, the German outfit has returned to the summit of the Ucits table, following the net addition of one fund over 12 months. Assets have risen by an impressive 32% over the year to October end. The bulk of Universal-Investment s inflows have been into nonvanilla strategies while investors in the firm s Ucits funds are mostly provided by private banks and wealth managers. In geographical terms, its investors are mainly from continental Europe, in particular Germany, Austria and Switzerland. In the coming year, it is looking to attract investors seeking returns which are less correlated to interest rate movements. AuM No OF FUNDS UNIVERSAL-INVESTMENT SCHRODER GAIA MONTLAKE $BN $6.5BN $5.9BN $3.BN 3 $bn MORGAN STANLEY $3.BN Total top 1 AuM $.2bn (Baml) $5.bn (Baml) LYXOR DEUTSCHE BANK $3BN $2.3BN 1 5 $bn $6.9bn ROTHSCHILD ASSET MANAGEMENT $2.1BN ALPHA UCITS $8M 213 $2.1bn 2 $28.9bn 215 $31.bn 216 $29.8bn 21 $35.1bn GOLDMAN SACHS $8M JAN 218 HFMWEEK.COM 21