Scotsman – THE City’s financial watchdog will this week pave the way for hedge funds to be sold to small investors.
It is currently illegal to market hedge funds to ordinary investors in Britain, but the Financial Services Authority is expected to relax current restrictions when it finally publishes its recommendations on the future of the sector.
After a change of heart during the consultation exercise, which began last June, the watchdog is expected to announce that it will allow fund of hedge funds to be set up in the UK and marketed to ordinary investors.
However, these new onshore funds are expected to carry health warnings on their risks.
The news has been enthusiastically welcomed by the hedge fund industry which has grown rapidly to more than 8,000 funds managing more than £1 trillion around the globe.
