International firms may have head start

While Spain’s regulators have prioritised the promotion of the domestic fund management industry, the flexibility allowed by the new framework and the introduction of new investment products such as hedge funds may benefit some of the international houses already operating in the country.

For Javier Nuñez, chief executive at BNP Paribas Gestión de Inversiones in Madrid, the new regulations benefit both domestic and international players. However, years of experience and sound administration and operational capabilities among some of the international asset management houses doing business in Spain might help foreign companies when it comes to introduce products that are still new for some of the domestic players.

One of the most important aspects of the new environment is the introduction of hedge funds, and the Spanish asset management arm of BNP Paribas already has a strategy in place for participating in this market.

“The first stage will be to launch funds of hedge funds according with the requirements of the new regulations,” Mr Nuñez said. “On a second phase we would like to develop single hedge fund strategies.” According to the draft of the regulations, only qualified or professional investors will be allowed to invest in single hedge fund strategies, whereas funds of hedge funds will be able to get money from retail investors. But, before getting things moving, they will have to wait and see the final version of the regulations, especially taking into account there are some rumours that the final draft will contain some last minute changes regarding the treatment of hedge funds.

Attitude towards investment among Spanish customers is still quite conservative and, therefore, products offering lower risk are still the preferred choice for most investors.

“We have been very successful with our range of guaranteed funds and dynamic money market funds,” said Mr Nunez. “In Spain there is a lot of demand for this type of product and this interest will continue in the future.”

Nuñez: a lot of demand for guaranteed funds