Hedge Funds Won’t Get More Money From EU’s Biggest Asset Manager

(Bloomberg) -- Amundi SA, Europe’s biggest asset manager, is stopping allocation to hedge funds to focus on mutual funds and other cheaper alternatives.

Inflows into offshore hedge funds, such as those registered in the Cayman Islands, has slowed to a trickle this year amid disappointment with high fees and low returns, and many investors are turning to alternatives that offer lower fees, easier withdrawal and more transparency.

Amundi is “refocusing on traditional and liquid alternatives,” a company spokeswoman said by email. Among the alternatives investors choose are so-called UCITS funds, heavily regulated EU funds with hedge fund-like characteristics that can be distributed to retail investors.

As part of the shift, Paris-based Amundi is disbanding its team in London that researches hedge funds. A new consolidated fund-research unit will be headed by Paul Weber in Dublin, the spokeswoman said. This new structure is a result of the integration of Pioneer Investments, which was acquired by Amundi in a 3.5 billion-euro ($4 billion) deal last year, she said.

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