Merger arbitrage emerged as the strategy most in demand with alternative UCITS investors, with 79 per cent of all respondents planning to increase or maintain their exposure in the coming quarter, according to ML Capital’s latest survey of the growing sector.
ML Capital surveyed a diverse range of active alternative UCITS investors, who collectively manage EUR50 billion and today invest upwards of EUR10 billion into Alternative UCITS products. Questions are aimed at discovering their forthcoming strategy allocations and are asked each quarter to the same respondents, in order to track asset flows between UCITS strategies.
The survey found that merger arbitrage strategies are likely to see significant inflows with 49% of respondents looking to allocate more to the asset class. There has also been a big spike in demand for market neutral strategies, with one third of investors wanting to increase their allocations. Conversely there has been a drop in demand for most equity hedge strategies with the most dramatically affected being European and Global.
US long/short funds meanwhile fare best of all equities strategies, with almost 40% of respondents planning to raise their investments. Japan though, is still struggling to attract attention with a lowly 7% of respondents planning to increase their allocations, the lowest level of any strategy in this quarters Barometer.
John Lowry, Co-Founder and Chairman of ML Capital, says: “The most significant trend in this quarters Barometer appears to be a widening out of interest across several strategies with more technical funds like Merger Arbitrage and Market Neutral now taking prominence, which may be a sign that the Alternative UCITS space is now beginning to mature.”