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Industry positive about AIFMD
23 June 2014
Asset managers and administrators are increasingly optimistic about the outlook for the AIFM directive, according to a new Multifonds survey
Asset managers had a significantly more positive attitude
towards the Alternative Investment Fund Managers (AIFM)
directive in the lead-up to the July 22 authorisation
deadline, according to a new survey by Multifonds.
The majority (68%) of respondents, who collectively manage and
administer assets exceeding $10trn and $35trn respectively,
expected the depositary costs associated with AIFMs to be
substantially less than previously feared, at around 2.5bps.
This represents a 50% reduction in estimates compared with
Multifonds’ 2013 survey.
"In previous years, the unclear cost of complying with the
AIFM directive presented a real concern – the
presumed high-cost levels would be the tipping point for the
directive’s ultimate success or failure," said
Keith Hale, executive vice president for client and business
development at Multifond.
"With depositary costs in particular now looking to be far
lower than expected, this year’s survey shows that
those concerns have subsided and the outlook is more positive
for the directive."
The industry does not expect the same exodus of managers
from Europe as a result of high costs. This year 53% expected
EU managers to leave Europe to setup offshore structures to
avoid the additional costs, a drop from 77% in 2013.
However, most respondents (82%) also believed that the
AIFM directive would push non-EU managers to set up
European operations in order to take advantage of the new
One of the biggest advantages is the AIFM
directive passport, which, once established, will help
gather more assets in Europe according to 72% of respondents.
Once the passport builds momentum, the well-established fund
domiciles stand to benefit most, particularly Luxembourg and
Ireland, which respondents said were the domiciles of choice.
While the future of the AIFM directive seems rosy, the
proverbial thorn lies in reporting to the regulators, which
over half (66%) of respondents cited as their most pressing
"Fund managers must figure out how to marry their multiple
systems together and then aggregate, store and report the
resulting data," said Hale.
Only 33% of fund manager respondents reported having provisions
in place for the reporting that the AIFM
Despite ongoing difficulties, there was a widespread belief
(82%) that the directive would
achieve its goal of improving investor protection.
"As a regulation that came in response to the financial crisis
in an attempt to regulate hedge funds, the AIFM
directive seems finally to be emerging as a regulation
that will bring some long term benefits to the industry," added