While 86 per cent of respondents to a Northern Trust survey say they broadly understand the implications of the Alternative Investment Fund Manager Directive, close to 70 per cent feel their investors are not engaged in AIFMD considerations.
“The AIFMD will ultimately affect every fund manager and their investors in Europe,” says Ian Headon, head of product development, Northern Trust Hedge Fund Services. “Across the industry, fund managers, fund advisors, custodians and administrators have been monitoring the development of AIFMD and doing research and development work to prepare, however with the majority of attendees at our event citing their AIFMD implementation projects are in the preliminary stages and feeling that their investors are not engaged, there is still more work to be done and more clarity around the directive required.”
The primary benefit of the AIFMD for asset managers is the creation of a pan-European passporting regime, making distribution easier. In order to secure the Passport, managers (AIFMs) and funds (AIFs) must comply with new regulations – in the areas of depositaries, operations and transparency, and governance.
Despite the distribution opportunities AIFMD will provide, 64 per cent of the attendees at Northern Trust’s AIFMD seminar saw the directive as primarily a compliance and cost overhead, while close to a third felt it was creating uncertainty and challenges for their business. Less than 10 per cent believed it was a strategically important opportunity for their business. Additionally, in the experience of those attending the seminar, only around 10 per cent of investors were demanding a fully compliant AIFMD fund product.
“We understand the increasing challenges our clients face in implementing not just AIFMD, but other regulations affecting their business and underlying investors,” says Toby Glaysher, head of global fund services for Europe, Middle East and Africa at Northern Trust. “To help them better navigate these challenges, we have launched a dedicated programme of workshops and provide regular updates from our experts on the latest regulatory developments.”
Northern Trust’s Global Fund Services business provides custody, fund administration, investment operations outsourcing, and ETF solutions to investment managers across the globe and across the spectrum of asset classes.