The Swiss private bank is looking to step up the pace of putting "alternative UCITS" funds on its platform.

Union Bancaire Privée intends to accelerate the rate at which it puts new UCITS-structured hedge funds on its platform, moving from the roster of four to as many as 15, keeping faith in the area even while other platforms have been closed. ("UCITS" stands for Undertakings for Collective Investment in Transferable Securities.)

The private bank and investments firm, whose headquarters are in Geneva, has been a hedge fund advocate during good and difficult times. It says it sets rigorous tests to admit “alternative UCITS” on the platform launched four years ago. Most recently, UBP launched a new equity arbitrage strategy on its alternative UCITS platform in partnership with London-based alternative investment manager Cheyne Capital Management (UK) LLP. The platform, holding a total of more than $700 million in assets, also hosts three other funds: a discretionary global macro strategy; a long/short equity strategy focusing on infrastructure and utilities, and a long/short strategy focused entirely on global healthcare.

There are four funds on the bank's fund platform at present. Effie Datson, who was appointed about two months' ago to the post of head of hedge funds, is keen to increase the amount added each year at a quicker pace, but within certain strict limits.

“We have added one manager a year since starting and we’d like to go to two managers a year; we’d like 10 to 15 managers – that’s our plan,” she told journalists in London yesterday. 

UBP’s strong platform, which provides UCITS managers with the infrastructure and distribution firepower they need, can be a real differentiator for the firm, she said. Datson joined the private bank in April having held senior roles at State Street and Deutsche Bank. 

The Swiss bank’s build-out of its platform contrasts somewhat with retrenchment to some other firms’ offerings. Media reports in March said Morgan Stanley is to shut its UCITs platform to third-party managers. Guggenheim Partners closed its alternative UCITS, Guggenheim Fund Solutions (GFS), just two years after launch (source: HFMWeek, 27 July, 2016). 

It can be tough to roll out new UCITS funds without a strong partner – such as a bank – and UBP’s distribution team, network and range of clients puts it in a competitive position in the space, Datson said.

“This distribution point is vital,” she said.

The UCITS structure – enabling funds to be bought and sold across national borders without some of the individual national registration requirements -  have been used by some hedge fund managers able to meet the daily liquidity and disclosure tests, among others, that these entities require. There are signs these structures are in fee and return terms as competitive as traditional offshore funds, Datson said. 

Family offices, high net worth individuals and private banks like UCITS funds for the regulatory and other safeguards embedded in them, she continued.

“We see that high-quality managers have UCITS versions of their strategies,” Datson said.

Across the whole of UBP, the private bank deploys about a total of $10 billion to hedge fund strategies, with some of that money going into discretionary, customised portfolios, and some into advisory channels, and the remainder into the platform. That figure compares with a total of SFr125.3 billion ($127.2 billion) in assets under management the bank held as at 31 December 2017.