Fund managers unsure about AIFMD data
30 June 2015 London
Image: Shutterstock
The implementation of the Alternative Investment Fund Managers Directive (AIFMD) has been a success, but industry players are concerned over how regulators are using their data, and uncertain over the benefits to the market, according to the Multifonds annual AIFMD survey.
A vast majority of respondents, 85 percent, said that local regulators have been successful in implementing AIFMD, however 81 percent cited regulatory reporting as their main concern, an increase from 66 percent in the 2014 survey.
On top of this, more than half, 55 percent, said they are uncertain about how regulators use the data reported, and only 23 percent thought AIFMD could help regulators to identify threats to the market and its stability.
Keith Hale, executive vice president for client and business development at Multifonds, said: “While it is encouraging the fund industry believes AIFMD has been successfully implemented, it is now on the shoulders of regulators to demonstrate the real value of the extensive efforts made by fund managers and administrators to comply with the directive.”
“With regulatory reporting clearly an increasing concern across the board, it is crucial that regulators vocalise the importance of AIFMD and clearly outline how the data will be used, otherwise it will be at risk of being perceived merely as an administrative or bureaucratic burden with little tangible value.”
There was a positive response with regards to the costs of AIFMD, with 56 percent saying they have seen an increase in depository costs of less than 2.5 basis points (bps). This is in line with expectations from the 2014 survey, in which 49 percent of respondents said they expected increases of this size, but a stark contrast to 2013’s results, in which respondents said they expected cost increases of up to 100 bps.
Participants in this year’s survey believe that AIFMD will rival UCITS as an international standard for distributing alternative investment funds, an increase from 54 percent that believed this in 2014.
Finally, almost three quarters of respondents, 74 percent, said they think the AIFMD passport should be extended to European Union fund managers. Of these, however, 39 percent think this should only happen once private placement is abolished, suggesting that existing channels for this are meeting current market needs.
The survey included responses from 62 firms in the global fund administration industry. Collectively, respondents have more than $16 trillion in assets under management and more than $20 trillion in assets under administration. They included hedge funds, commodities, private equity, real estate, mutual funds and unit trusts.
A vast majority of respondents, 85 percent, said that local regulators have been successful in implementing AIFMD, however 81 percent cited regulatory reporting as their main concern, an increase from 66 percent in the 2014 survey.
On top of this, more than half, 55 percent, said they are uncertain about how regulators use the data reported, and only 23 percent thought AIFMD could help regulators to identify threats to the market and its stability.
Keith Hale, executive vice president for client and business development at Multifonds, said: “While it is encouraging the fund industry believes AIFMD has been successfully implemented, it is now on the shoulders of regulators to demonstrate the real value of the extensive efforts made by fund managers and administrators to comply with the directive.”
“With regulatory reporting clearly an increasing concern across the board, it is crucial that regulators vocalise the importance of AIFMD and clearly outline how the data will be used, otherwise it will be at risk of being perceived merely as an administrative or bureaucratic burden with little tangible value.”
There was a positive response with regards to the costs of AIFMD, with 56 percent saying they have seen an increase in depository costs of less than 2.5 basis points (bps). This is in line with expectations from the 2014 survey, in which 49 percent of respondents said they expected increases of this size, but a stark contrast to 2013’s results, in which respondents said they expected cost increases of up to 100 bps.
Participants in this year’s survey believe that AIFMD will rival UCITS as an international standard for distributing alternative investment funds, an increase from 54 percent that believed this in 2014.
Finally, almost three quarters of respondents, 74 percent, said they think the AIFMD passport should be extended to European Union fund managers. Of these, however, 39 percent think this should only happen once private placement is abolished, suggesting that existing channels for this are meeting current market needs.
The survey included responses from 62 firms in the global fund administration industry. Collectively, respondents have more than $16 trillion in assets under management and more than $20 trillion in assets under administration. They included hedge funds, commodities, private equity, real estate, mutual funds and unit trusts.
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