A recent unscientific survey conducted by Northern Trust of 130 of its fund manager clients, prospective clients and consultants found that a vast majority felt they understood the European Unions Alternative Investment Fund Manager Directive (AIFMD), while a smaller majority believed their investors were not engaged in AIFMD considerations.
According to Northern Trust, 86% said they understood the directive while 70% believed their investors did not. Only around 10% of investors were demanding fully compliant AIFMD fund products, according to respondents.
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 advisers, 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.
AIFMD creates a pan-European passporting regime, which is expected to ease distributions. It requires alternative investment fund managers and alternative investment funds to comply with new depositary, operational, transparency and governance regulations to secure a such a passport.
According to the survey results, 64% of respondents saw the directive as primarily a compliance and cost overhead, while nearly a third felt it was creating uncertainty and challenges for their businesses. Less than 10% believed it is a strategically important opportunity for their business, Northern Trust says.
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.
(CG)