Fund managers believe the European Commission’s Alternative Investment Fund Managers Directive will lead to fewer non-EU fund managers operating in Europe resulting in a less competitive market, according to research from Deloitte.
More than two-thirds (68 per cent) believe that AIFMD will reduce the competitiveness of the EU’s alternative investment funds industry.
The same number believe the directive will result in fewer non-EU managers operating in the EU and 61 per cent believe AIFMD will affect their choice of fund domicile, leading to reduced choice for investors.
Stuart Opp, lead investment partner at Deloitte, says: “The directive continues to be controversial, and for many respondents it will add cost for marginal benefit. The directive must be implemented by July 2013 and for the first time managers of non-UCITS funds, both onshore and offshore, will be required to seek authorisation under a comprehensive EU regulatory framework. Nearly a quarter of managers surveyed also expect redemption terms to be impacted by AIFMD and more than half think leverage figures will confuse investors. The key challenge for managers is explaining these changes to their investors.”
Deloitte surveyed 23 hedge, private equity and real estate fund managers collectively managing GBP175bn of assets.
AIFMD came into force in July 2011. It regulates how alternative investment fund managers distribute funds and operate their business. An implementing regulation from the European Commission is expected in September 2012.