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Alternative investment industry nods to AIFMD’s benefits but jurisdictional variances continue to cause confusion

13 May 2019

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  • 69% of alternative investment fund managers predict the quantity of assets deployed in AIFMD-compliant structures to grow over the next two years
  • 73% of alternative managers expect to see more non-EU managers fundraising through AIFs
  • Yet 60% cite variances of AIFMD interpretation between different EU countries as causing confusion

Over two-thirds (69%) of alternative investment fund managers expect to see quantity of assets deployed by managers in AIFMD structures increasing over the next two years. However, almost as many cite the variances in how the regulation is interpreted between different jurisdictions as a continuing source of confusion.

Intertrust, a global leader in providing expert administrative services to clients operating and investing in the international business environment, interviewed over 100 alternative investment fund managers in private equity, real estate, hedge and infrastructure based in Europe, North America, the Middle East and Asia about the benefits and challenges generated by AIFMD since its introduction in 2011.

89% alternative managers said they were familiar with the regulation of which two thirds (66%) said they were either very or extremely familiar. The key benefits of AIFMD cited by respondents were full compliance and regulatory assurance (41%), greater transparency (30%) and better reporting standards (27%).

The study also suggests that the rising number of non-EU fund managers using AIFMD-compliance structures to market funds in Europe will continue to grow; three-quarters (73%) expect to see more non-EU managers using AIFs to fundraise over the next two years while two-thirds (66%) identified US and Asian managers especially.

Despite the level of familiarity with AIFMD, regulatory arbitrage has muddied the waters and created a knowledge gap when it comes to practical application of the rules. 60% agreed that variances of AIFMD interpretation between different EU member states are responsible for widespread confusion about implementation.

Ciara Smith, Head of Regulatory and Compliance Services at Intertrust Group said, “On the one hand this research paints a picture of AIFMD as having better formalised the market to the benefit of all stakeholders. It’s clear that AIFMD has created a new landscape for EU and non-EU investors alike both in terms of capital deployment and fundraising. Since its introduction the AIF market has grown dramatically, and respondents fully expect this to continue. Yet few pieces of regulation have generated as much demand for guidance among clients as they try to navigate through its complexities.”

To download the full report, ‘AIFMD, navigating a shifting landscape’, please click here.

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