Global Hedge Fund Managers Respond to the AIFMD (Preqin)

July 2014

KEYWORDS: AIFMD, alternative fund managers, AIFM, Survey, EU Member State, EU Marketing Passport, marketing, reporting requirements, depositary, due diligence, risk management, remuneration, investor confidence, investor protection, Hedge Fund Managers

Authors:

Preqin

Organizations:
  • Preqin

Summary:

After years of discussions and amendments the Alternative Investment Fund Managers Directive (AIFMD) was written into national law by EU member states on 22 July 2013. Following a year long grandfathering period, existing AIFMs have until 22 July 2014 to apply for authorization to the regulators.

The new Directive aims to provide harmonized regulatory standards across all alternative investment managers. In particular, hedge fund managers will need to obtain authorization, meet ongoing reporting conditions and comply with transparency requirements in order to manage and market hedge funds within the EU. Key requirements of the Directive include the appointment of a depository, reporting requirements, separation of risk and portfolio management, an appropriate and regularly updated due diligence process and remuneration controls. The AIFMD was introduced to increase investor confidence in alternative asset managers through the reduction of systemic risk and enhancement of investor protection. However some critics of the new regulations have said they increase cost and complexity.

With that in mind Preqin turned its attention to hedge fund managers globally to find out more about how they are reacting to this regulation. In June 2014 Preqin conducted a survey of 150 global hedge fund managers representing $380bn in assets under management. We asked these managers to answer the following questions:

• What is their outlook on regulation and the AIFMD in particular?
• What are their concerns about the Directive?
• How prepared are they for the new regulation?
• How do they plan to market funds in the EU?

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