Asset Management
Investment Managers Sleepwalking Towards Europe's AIFMD Regime - Survey

The most important European financial regulatory initiative to hit the investment management industry since MIFID came into force in 2007 is just around the corner and a recent survey shows that the industry is grossly under-prepared.
The most important European financial regulatory initiative to
hit the investment management industry since MIFID came into
force in 2007 is just around the corner and a recent survey shows
that the industry is grossly under-prepared.
Next week the Alternative Investment Fund Management Directive
(AIFMD) is fully introduced and only 53 per cent of alternative
investment fund managers have filed under the legislation, says
the survey by Alceda and Kepler Partners.
The survey also revealed that 32 per cent of fund managers said
they were already compliant, while a further 19 per cent said
they were planning to submit an application before the 22 July
deadline.
Unsurprisingly European managers responding to the survey were
better prepared for the directive while managers in the rest of
the world have some catching up to do.
AIFMD is designed to give investors greater protection and means
hedge funds and private equity firms are now subject to the same
rules as mutual and pension funds. The rules were proposed in the
aftermath of the 2008 financial crunch; critics have said they
are an unnecessarily draconian set of rules to deal with a
problem that has been exaggerated.
Core measures include requiring fund managers to obtain
authorisation before they operate in the EU; satisfying
authorities about their internal risk management arrangements;
providing certain information to investors; rules on leverage and
custodial standards; and rules for offshore funds and managers
located in so-called third countries.
When asked which aspects of AIFMD posed the greatest threats to
their business 30 per cent of respondents cited depositary costs,
remuneration and the end of private placement as their most
serious concerns. There was also the perception that AIFMD would
lead to more offshore funds moving onshore.
"It’s clear that the general understanding of the implications of
AIFMD on the alternative fund management industry is low, with 41
per cent of respondents to our survey stating that they have a
limited understanding," said Georg Reutter, partner at Kepler
Partners.
"In particular we found that alternative asset managers
headquarted outside Europe are potentially sleepwalking into the
unknown despite the potential impact on their business," he
added.
Overall 56 alternative fund managers from around the globe took
part in the survey.