Marshall Wace Asset Management has
moved the majority of its Cayman Islands-based hedge funds to Ireland.
The domicile shift from the
offshore to an onshore location entails the creation of a new feeder fund in Ireland
in the form of a qualifying investor fund.
The Irish QIF is a regulated,
specialist investment fund that is marketed to sophisticated and institutional
investors, who must meet minimum subscription and financial resources
Marshall Wace’s new feeder fund with
20 sub-funds replicates the structure the fund manager maintained in Cayman,
consisting of one sub-fund for each of Marshall Wace’s strategies.
The firm is expected to liquidate
the Cayman funds, requiring its investors to redeem and then re-invest in the
The move can be interpreted as indicative
of a general trend among European fund managers towards regulated structures,
such as UCITS-compliant funds or QIFs, in response to investor demands for more
oversight and transparency,
Marshall Wace already runs
UCITS-compliant funds from Ireland and Luxembourg. UCITS are allowed to operate
freely throughout the European Union on the basis of a single authorisation
from one member state,
Marshall Wace was recently the
first European alternative fund manager to launch an exchange traded fund.
Exchange traded funds which can be
bought and sold like a stock have become more popular, less expensive method of
gaining exposure to different asset classes.
Ireland recently introduced
legislation making it easier for Cayman and other non-Irish funds to
re-domicile to Ireland.
However, Marshall Wace’s seems to
have decided on the move before these plans were announced.
The ongoing uncertainty over the EU
alternative investment fund managers directive may have also influenced the
decision to re-domicile to Ireland, as there are question marks over whether
European investor will be able to invest in hedge funds that are domiciled
outside the EU.