Since the advent of the financial crisis, demand for liquid alternative products – which offer hedge fund strategies in a regulated structure – has risen, reflecting the wider investment community’s desire for more regulated and transparent funds.  Accordingly, assets under management in the liquid alternatives space have multiplied five-fold since 2008.  In Europe, liquid alternative vehicles take the form of Undertakings for Collective Investments in Transferable Securities (UCITS) funds, which are subject to certain liquidity, transparency and diversification requirements, as well as leverage restrictions, under the pan-European UCITS Directive.  At the recent Liquid Alternative Strategies Global conference held in London, speakers discussed the rise of alternative UCITS funds as a global investment solution.  This article, the first in a two-part series, examines what drives the recent growth in alternative UCITS funds and several key factors that managers should consider when assessing their ability to capitalize on the demand for UCITS products.  The second article will address distribution of UCITS products and operational due diligence.  For more on UCITS, see “UCITS: An Opportunity for Hedge Fund Managers,” Hedge Fund Law Report, Vol. 2, No. 27 (Jul. 8, 2009).  For more on liquid alternative structures, see “The First Steps to Take When Joining the Rush to Offer Registered Liquid Alternative Funds,” Hedge Fund Law Report, Vol. 7, No. 42 (Nov. 6, 2014); and “Citi Prime Finance Report Describes the Competition among Traditional, Hedge and Private Equity Fund Managers for $1.3 Trillion in Liquid Alternative Assets (Part Two of Two),” Hedge Fund Law Report, Vol. 6, No. 22 (May 30, 2013).