Things are looking grim for the hedge fund industry's hopes of persuading the multi-trillion dollar retail market to buy into their products, with the latest blow coming in the form of research from New York University's Stern School of Business.

Managers' desire to tap the retail market is more of a long-term ambition than a pressing need, but a few have dipped in a toe and many see retail investors as a source of growth. This is partly why managers are launching Ucits funds, which satisfy European Union regulations for public distribution.