'Ucits III has blurred the boundary between conventional fund managers and hedge funds; as demand grows, it will be met by increasing supply and it is beholden upon new entrants to bring only proven investment managers and strategies to market, so as not to tarnish this new and exciting sector,' says Hardy (pictured).

Hardy says Polar Capital's UK Absolute Return Fund is a higher volatility fund than its peers but with this comes greater flexibility and the opportunity to take advantage of current market anomalies. With an option of up to 40 per cent net exposure, the fund is well positioned to capture upside in the market for its investors while a number of its peers are forced to follow more market neutral positions.

In March 2008 the market was up 2.8 per cent and the fund returned 3.3 per cent.

The fund was launched in June last year, with the aim of delivering positive absolute returns regardless of UK stock market conditions by fully utilising the wider investment powers permitted under Ucits III regulations.

Hardy says: 'The value of flexibility and a proven track record is essential in today's market. Investors do not want to lose the opportunities but are scared of getting their fingers burnt again. The Ucits III regulation provides structure and definition to maximising market opportunities through both long and short positions and the UK Absolute Return Fund is well positioned to hopefully continue to realise the returns on these advantages.'