This article appears courtesy of Global Investor.
Here’s an opportunity for European pension funds : they, and other foreign investors, can now delegate responsibility for hedging currency exposure to their UK fund manager, simplifying their portfolio management and reducing hedging costs. It is unclear how quickly demand from this sector will pick up but share class hedging creates considerable challenges for investment managers, for which they appear largely unprepared. Instead service providers must create solutions to automate the complex operational processes which underpin the task, thereby relieving mangers of the responsibility for day-to-day hedging.
The provision for hedging of multiple share class was among a number amendments to the New Collective Investment Schemes (COLL) source book, which came into effect at the beginning of February.
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