July 16, 2006

Italian Hedge Fund Market

The Italian hedge fund industry has not clarified its terms and relaxed its regulations yet. To achieve a steady growth, it is very much necessary to relax the regulations. Still there is no clear distinction between funds of hedge funds and single manager hedge funds. The biggest challenge will be facilitating the growth of the market, as single hedge funds represent a mere 3% of the market, while hedge funds account for the remaining 97%.

There are a number of reasons for this imbalance. Lack of expertise in this area and a volatile market are responsible for this. The Italian market has been constrained by a lack of competition. Around 80% of the asset management industry in Italy is controlled by the banks. According to Italian industry experts, the industry is keen to encourage foreign investment into Italian hedge funds and there are huge opportunities for those investors.

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