Taking away the AIFMD burden
For US-based hedge fund managers that already have a presence in Europe – and are confident they can meet the AIFMD's substance and reporting requirements – it makes sense to apply for AIFM authorisation. But what about US managers with European investors but no European presence? Or US managers with no current European investors, but the desire to expand into Europe in the future? Maitland can assist.
Maitland is a relatively new brand name in the United States market, having acquired Admiral Administration in 2012. Following its full integration into the Maitland group, Admiral has now rebranded to "Maitland".
Maitland is a fast growing global institutional fund administrator. It is fully independent and manager-owned with USD210 billion of assets under administration and 1000 employees across 14 offices in 12 countries.
Maitland is not only a fund administrator but also a global advisory group, with its roots as an innovative law firm in Luxembourg in 1976 offering cross-border structuring solutions to corporates and some of the world's wealthiest families. This in-house legal and tax expertise, as well as Maitland's independence, set it apart from most other fund administrators – and mean that it is ahead of the game when it comes to administrators moving up the advisory services chain of added value.
Worldwide, Maitland provides services to a wide range of onshore and offshore fund structures including alternative investment funds, endowments, mutual funds, and annuities. The global client base consists of over 3500 portfolios, comprised of traditional, alternative, and mutual funds.
In the North American market, Maitland remains focused on Admiral's 19-year niche in alternative fund administration, providing customised solutions for hedge funds, hybrid funds and private equity & real-estate funds.
Scott Price (pictured), Head of Business Development and Client Management for North America for Maitland, says that Maitland is in a powerful position to assist US alternative managers in the EU through Maitland's multi-jurisdictional reach and AIFMD capabilities.
"Maitland has AIFMD mancos both in Luxembourg and in the United Kingdom, as well as a white-labeled product solution," says Price. "Fund clients can focus on their core activity of portfolio management but outsource to Maitland's AIFMD-compliant manco all the duties envisaged in the AIFMD including risk management, compliance monitoring, regulatory reporting and investor due diligence."
Maitland has also established its own comprehensive AIFMD compliant SIF (Specialised Investment Fund) platform, for product construction and innovation in the EU. This is a Luxembourg domiciled alternative investment umbrella fund with multiple sub-funds each with flexible investment strategies allowing managers to invest in a range of alternative asset classes and have their "own brand" that comes with a ready-made EU passport.
Many alternative funds and their managers are still weighing up the options in terms of the AIFMD. It may seem overwhelming to some to implement the changes needed to attract investors in the EU but we would remind them that the AIFMD is rapidly becoming the minimum accepted standard.
So if the costs are too high to go it alone initially, managers should consider partnering with a service provider as a way of testing the waters before developing a full-fledged AIFM presence later. The more regulatory risk and compliance functions that can be outsourced, the less managers have to worry about what changes to make to their operations and business models – and the better chance they have to focus on delivering alpha