U.K. retail investors would be allowed to buy into onshore multimanager alternative investments such as hedge funds of funds and private equity under a proposal by the Financial Services Authority.
Although U.K. retail investors already can access hedge funds through various strategies, including some structured products linked to hedge funds, the proposals would mark the first time they can directly invest in a hedge funds of funds and other alternatives.
However, FSA spokesman Robin Gordon-Walker added that asset managers who offer such retail products likely will be required to disclose to retail investors more information on transparency and due diligence compared to institutions.
This is another type of product that will allow retail investors to get greater diversification, Mr. Gordon-Walker said in a telephone interview. Furthermore, existing products are basically long only. This will bring into the scope of traditional, long-only managers (investment tools such as) shorting.
The public comment period ends May 22, and the FSA is due to issue its final policy statement by the end of the year.