Survey reveals uncertainty among fund managers
02 April 2014 Pittsburgh
Image: Shutterstock
67 percent of alternative investment fund managers (AIFMs) say they are still concerned with reporting to local regulators, according to Confluence's 2014 Alternative Investment Fund Management Directive (AIFMD) Transparency Reporting Survey.
This statistic is particularly salient, considering the fact that nearly all (95 percent) of the 60 AIFMs and third party administrators surveyed claimed that they feel informed on the requirements of AIFMD.
“Fund managers and third-party administrators are facing one of the most complex regulatory reporting challenges the industry has had to manage to date,” said Melvin Jayawardana, European market manager at Confluence.
“At the heart of their concern is AIFMD's requirement for reports to be validated, formatted and posted as quickly as 30 days after the end of the reviewed period.”
“This is a major hurdle for an industry that has not implemented methods for handling such reporting granularity or frequency in a very narrow window before now."
In addition to their concerns with local reporting, almost half (42 percent) of AIFMs and third-party administrators said they were unsure of how they will solve the reporting challenge. For survey respondents who did decide on a solution, roughly half (52 percent) said they planned to use a software solution for AIFMD transparency.
The vast majority (82 percent) of third party administrators said their organisation would support clients by offering an AIFMD transparency reporting solution, with 38 percent saying they would use a software solution. Despite this support, more than half (59 percent) said their organisation would not accept liability for the quality of reporting provided to regulators.
Jayawardana continued: "AIFMD is creating an urgent need for fast and reliable solutions. At Confluence, we believe the number of AIFMs and third-party administrators looking for innovative and dependable software solutions will accelerate the trend toward data automation in the back office.”
“We see this need as providing a tremendous opportunity to usher in a new era of operational sophistication and streamlined business processes for the alternative investment sector, which will likely open up doors to new investors and lead to significant growth in the sector over the next several years."
This statistic is particularly salient, considering the fact that nearly all (95 percent) of the 60 AIFMs and third party administrators surveyed claimed that they feel informed on the requirements of AIFMD.
“Fund managers and third-party administrators are facing one of the most complex regulatory reporting challenges the industry has had to manage to date,” said Melvin Jayawardana, European market manager at Confluence.
“At the heart of their concern is AIFMD's requirement for reports to be validated, formatted and posted as quickly as 30 days after the end of the reviewed period.”
“This is a major hurdle for an industry that has not implemented methods for handling such reporting granularity or frequency in a very narrow window before now."
In addition to their concerns with local reporting, almost half (42 percent) of AIFMs and third-party administrators said they were unsure of how they will solve the reporting challenge. For survey respondents who did decide on a solution, roughly half (52 percent) said they planned to use a software solution for AIFMD transparency.
The vast majority (82 percent) of third party administrators said their organisation would support clients by offering an AIFMD transparency reporting solution, with 38 percent saying they would use a software solution. Despite this support, more than half (59 percent) said their organisation would not accept liability for the quality of reporting provided to regulators.
Jayawardana continued: "AIFMD is creating an urgent need for fast and reliable solutions. At Confluence, we believe the number of AIFMs and third-party administrators looking for innovative and dependable software solutions will accelerate the trend toward data automation in the back office.”
“We see this need as providing a tremendous opportunity to usher in a new era of operational sophistication and streamlined business processes for the alternative investment sector, which will likely open up doors to new investors and lead to significant growth in the sector over the next several years."
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