An inability to live up to the hype and performance disappointment have been voted the greatest risk to UCITS hedge funds, according to three quarters of investors in response to a study by Alternative Decisions.

In Better UCITS Hedge Funds, the first survey and industry best practice guide on UCITS Hedge funds from Alternative Decisions, opinions from industry leaders are collated, showing that there is huge potential for UCITS, which should be seen as a complement to other funds rather than a direct replacement of offshore structures.

European investors, promoters and fund managers' responses were debated by industry leaders from five European countries, providing firsthand insights and agreeing on best practices for this expanding investment arena.

"The current euphoria for UCITS needs to be married to education and technical know-how," said Lawrie Chandler, cofounder of Alternative Decisions. "UCITS is a great brand for certain hedge fund strategies but successful asset attraction demands new marketing and distribution techniques.

"We caught the spirit around UCITS in the survey and then dialled into the issues with leading practitioners in a boardroom meeting. This is the first time opinions and experience have come together to define the challenges facing UCITS Hedge Funds investors and fund managers."

The results, opinions and Best Practice guide are available here.

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