By Matt Ritchie
A majority of fund managers are picking the Alternative Investment Fund Managers Directive (AIFMD) to have a cooling effect on competitiveness in the EU’s investment fund industry, a new survey from Deloitte has revealed.
The survey revealed 68 per cent of fund managers believed the directive would reduce the competitiveness of the market, while the same number believed the AIFMD would result in fewer non-EU managers operating in the region.
Meanwhile, 61 per cent of the 23 hedge, private equity and real estate fund managers surveyed believed the AIFMD would affect their choice of fund domicile, leading to reduced choice for investors.
Deloitte Ireland head of investment management Mike Hartwell said many commentators have suggested that the directive is creating a more protective EU market that is sheltered from competition.
“The fund managers we surveyed believe it will lead to non-EU funds leaving the European market and this, combined with some managers moving offshore, could drastically reduce the number of managers in the market and reduce competition.”
Deloitte investment partner Stuart Opp added the AIFMD would “add cost for marginal benefit” for many respondents, with managers of non-Ucits funds required to seek authorisation under a comprehensive EU regulatory framework for the first time.
“Nearly a quarter of managers surveyed also expect redemption terms to be impacted by AIFMD and more than half think leverage figures will confuse investors. The key challenge for managers is explaining these changes to their investors.”