Hedge fund firm Finisterre Capital has launched a European Union-regulated fund.
Reuters reported that Finisterre made the decision to launch the new fund after one of its insurance clients informed the London-based firm that it may redeem its investment from an existing fund because the EU’s proposed new regulation aimed toward insurers will make it more expensive for companies to invest in hedge funds. The undisclosed insurance company has transferred its investment to the newly-launched UCITS-compliant fund.
The proposed Solvency II capital rules, which is due to take effect in 2016, mandates that insurers must set aside more capital when investing in offshore hedge funds that are not regulated by the EU.
UCITS, or Undertakings for Collective Investments in Transferable Securities, is the European regulatory framework for funds that can be sold across Europe and offers better liquidity than traditional hedge funds.
Founded in 2002, Finisterre Capital specializes in emerging markets and offers funds in a variety of asset classes, including sovereign debt, local currency debt, foreign exchange, corporate credit, special situations and equity.