A tale of two issues

Two big issues set to dominate the hedge fund industry are convergence in its various forms, and Ucits III. The two are clearly linked, as long-only managers increasingly consider launching halfway-house, regulated onshore products such as 130/30 portfolios to improve margins, to try to offer some alpha in a world where beta has been cheaply commoditised, to retain staff with derivatives products not unlike hedge funds, and possibly also to test their shorting skills before going holus bolus int