Almost three-quarters of managers regard the AIFM directive as a business threat.
According to a recent survey conducted by Deloitte, 72 per cent of managers view the new regulation as a business threat. The largest concern for fund managers is depositary costs, with 84 per cent of those surveyed citing this. Delegation was the next major concern, with 78 per cent naming this as a worry, while changes to contactual arrangements and routes to market was cited by 67 per cent of those questioned.
“Managers are facing significant organisational and operational change under AIFMD with far-reaching business consequences. The cost of doing business in Europe is set to rise disproportionately for smaller managers who have less internal resources to deal with the compliance responsibilities. There will clearly be a trade-off for managers to consider in determining their approach to AIFMD and managers will respond differently, depending on their distribution strategy and client profile,” said Mike Hartwell, head of investment management at Deloitte Ireland.
“The survey shows that AIFMD will increase transparency for investors. More than half of respondents (53 per cent) plan to provide investors with additional information as a result of AIFMD’s regulatory reporting requirements. However, increased transparency and investor protection will be counterbalanced by less choice and competition in the market, increased expense ratios, confusion over leverage figures and longer redemption terms in some cases,” added Hartwell.
“It comes as no surprise that a sizeable majority of respondents view AIFMD as a business threat. The depositary, marketing and remuneration rules required under AIFMD will have significant business impacts on fund managers,” said Stuart Opp, lead investment partner at Deloitte.