AIFMD ready? 13 percent unsure in new survey
15 July 2014 London
Image: Shutterstock
A survey released by Alceda and Kepler Partners shows 47 percent of alternative investment fund managers have still not filed under the Alternative Investment Fund Management Directive (AIFMD).
Fifty-six alternative fund managers representing Europe, Asia-Pacific and the US, with in excess of $300 billion assets under management completed the survey.
Authorisation under the AIFMD means fund managers will be subject to new requirements that will have an operational impact on the industry. These include increased requirements for due diligence, better risk and liquidity monitoring and new reporting and disclosure requirements as well as clearer marketing and communications rules.
When asked if they were ready for the AIFMD, only 32 percent said they were already compliant. A further 19 percent said they were planning to submit an application before the 22 July 2014 deadline, with 13 percent of the respondents are still unsure about their intentions.
Some 17 percent of respondents said they preferred to maintain the UCITS access route, which was originally designed as a retail structure, but is increasingly used by institutional investors.
A number of firms surveyed were still undecided on which route to take, with eight percent saying they were considering using third party service providers and four percent saying they would continue using the private placement route where managers can market within the EU under a specific private placement regulatory framework. However, this option will expire in 2018. Four firms said they would not market within the EU.
When asked which aspects of AIFMD posed the greatest threats to their business, 30 percent of respondents cited depositary costs, remuneration and the end of private placement as their most serious concerns.
However, over 40 percent believe in the benefits of a EU-wide distribution passport and increased investor confidence under the AIFMD brand, in particular, the opportunity to extend both the product range and the distribution of their products across Europe.
There was also the perception that AIFMD would lead to more offshore funds moving onshore.
Michael Sanders, CEO and chairman of the board of Alceda, said: “Clearly, the alternative asset management industry is at the crossroads. A combination of intense regulation, cost pressure, consolidation and globalisation, is forcing many participants to take a close look at their business and operating models.”
“What is clear from this survey is that there is still an element of wait and see about AIFMD, but we feel that the real winners of the future will be those alternative managers that readily embrace EU regulation, be it under UCITS or AIFMD.”
Georg Reutter, partner in Kepler Partners, said: “It’s clear that the general understanding of the implications of AIFMD on the alternative fund management industry is low, with 41 percent of respondents to our survey stating that they have a limited understanding. In particular we found that alternative asset managers headquarted outside Europe are potentially sleepwalking into the unknown despite the potential impact on their business.”
“Encouragingly the majority of managers do not think that AIFMD will impact their strategy nor [will it] negatively impact the continued growth of alternative UCITS funds.”
“Investment managers are concerned about the implication on remuneration and private placement that will come in with AIFMD. However, from an investor perspective it should be good news as it will increase confidence.”
Fifty-six alternative fund managers representing Europe, Asia-Pacific and the US, with in excess of $300 billion assets under management completed the survey.
Authorisation under the AIFMD means fund managers will be subject to new requirements that will have an operational impact on the industry. These include increased requirements for due diligence, better risk and liquidity monitoring and new reporting and disclosure requirements as well as clearer marketing and communications rules.
When asked if they were ready for the AIFMD, only 32 percent said they were already compliant. A further 19 percent said they were planning to submit an application before the 22 July 2014 deadline, with 13 percent of the respondents are still unsure about their intentions.
Some 17 percent of respondents said they preferred to maintain the UCITS access route, which was originally designed as a retail structure, but is increasingly used by institutional investors.
A number of firms surveyed were still undecided on which route to take, with eight percent saying they were considering using third party service providers and four percent saying they would continue using the private placement route where managers can market within the EU under a specific private placement regulatory framework. However, this option will expire in 2018. Four firms said they would not market within the EU.
When asked which aspects of AIFMD posed the greatest threats to their business, 30 percent of respondents cited depositary costs, remuneration and the end of private placement as their most serious concerns.
However, over 40 percent believe in the benefits of a EU-wide distribution passport and increased investor confidence under the AIFMD brand, in particular, the opportunity to extend both the product range and the distribution of their products across Europe.
There was also the perception that AIFMD would lead to more offshore funds moving onshore.
Michael Sanders, CEO and chairman of the board of Alceda, said: “Clearly, the alternative asset management industry is at the crossroads. A combination of intense regulation, cost pressure, consolidation and globalisation, is forcing many participants to take a close look at their business and operating models.”
“What is clear from this survey is that there is still an element of wait and see about AIFMD, but we feel that the real winners of the future will be those alternative managers that readily embrace EU regulation, be it under UCITS or AIFMD.”
Georg Reutter, partner in Kepler Partners, said: “It’s clear that the general understanding of the implications of AIFMD on the alternative fund management industry is low, with 41 percent of respondents to our survey stating that they have a limited understanding. In particular we found that alternative asset managers headquarted outside Europe are potentially sleepwalking into the unknown despite the potential impact on their business.”
“Encouragingly the majority of managers do not think that AIFMD will impact their strategy nor [will it] negatively impact the continued growth of alternative UCITS funds.”
“Investment managers are concerned about the implication on remuneration and private placement that will come in with AIFMD. However, from an investor perspective it should be good news as it will increase confidence.”
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