Scott Carnachan was recently quoted in IgnitesAsia, an FT publication, regarding the challenges of bringing retail liquid alternatives to Asia.
A proliferation of liquid alternatives products registered for sale to mass retail investors has hit the U.S. in recent years, but few are available in Asia. The association of these low-volatility strategies with risky private hedge funds, tighter sales procedures at retail intermediaries and increased scrutiny by regulators are all hurdles to bringing such products to the wider public in the region.
Scott commented: “Hedge funds for retail investors haven’t been authorised for a long time, so regulators would be starting afresh and are likely to be even stricter now about what the funds can invest in.”
“A second challenge would be in marketing these products, said Scott, “Since the Lehman mini-bond crisis in Hong Kong, the focus on sales processes, suitability and investment advice has intensified, with higher expectations now in terms of investor protection than 10 years ago.”
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