Germany’s tug of war

Germany’s structured product issuers have been raking it in from hedge fund-linked notes. But new laws liberalising the hedge fund business have thrown open the market to mutual fund providers. A fight to capture the attentions of the retail investor now looks imminent. By Sarfraz Thind

Germany’s hedge fund business is set to erupt as banks issuing structured products go head-to-head with the fund management sector, which is seeking to tap into the newly liberalised market. Up until last year, the German retail market had only been able to access hedge funds through structured notes. The absence of a regulatory structure meant that, until recently, hedge fund investment through mutual fund wrappers, single-manager and funds of hedge funds – as opposed to notes –