Although far from scientific, a new survey from Northern Trust shows that fund managers regard the Alternative Investment Fund Manager Directive (AIFMD) as a low priority.
The survey was conducted among approximately 130 Northern Trust fund manager clients, prospective clients and consultants attending a recent seminar on the European Union’s AIFMD. The results showed that although 86% of attendees broadly understood the implications of the directive, close to 70% felt their investors were not engaged in AIFMD considerations.
“The AIFMD will ultimately affect every fund manager and their investors in Europe,” said Ian Headon, head of product development with 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 that 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 and funds must comply with new regulations in the areas of depositaries, operations and transparency, and governance.
Despite the distribution opportunities that AIFMD will provide, 64% 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% believed it was a strategically important opportunity for their business. Additionally, in the experience of those attending the seminar, only roughly 10% of investors were demanding a fully compliant AIFMD fund product.