By regulating alternative fund managers rather than the funds themselves, the EU’s Alternative Investment Fund Managers Directive (AIFMD) has taken a radical new approach to investor protection which, in turn, has created new complexities, costs and considerations for those operating in this sector This is not just an issue for EU managers alone.
Nobody ever suggested AIFMD compliance would be easy. Indeed, by regulating alternative fund managers rather than the funds themselves, the EU’s AIFMD has taken a radical new approach to investor protection which, in turn, has created new complexities, costs and considerations for those operating in this sector.
But this is not just an issue for EU managers alone. The challenge is a global one: any alternative fund manager, in any country that markets their funds to EU investors will need to fall in line with AIFMD although full compliance is not immediately required. It depends on the marketing strategy, and the Private Placement Regimes of countries you are marketing to and the domicile of the alternative investment fund manager (AIFM) and the alternative investment fund (AIF). This creates a host of new organizational requirements for managers to grapple with and new business complexities for organizations to overcome.
While uncertainty may have been an oft-cited (and usually legitimate) excuse for inaction in the past, the reality is that organizations and fund managers operating in this sector will need to take immediate action if they hope to achieve compliance before the registration dates set by member states. Deadlines are fast approaching and significant work remains for all parties operating in the alternative investment market – managers, depositories, investors and regulators. Simply put, this is no time for inaction.
That is why we created the AIFMD Insider News: to take action to help those operating in this sector understand the issues more clearly; to share advice and insights based on the collective experience of KPMG professionals in the market; and to cut through the complexity of AIFMD by exploring some of today’s ‘hot topics’.
Over the course of this article series, every 2 weeks, some of the industry’s most experienced advisors will provide readers with context, insight and practical advice on key topics related to AIFMD. They will discuss important issues that are central to AIFMD such as remuneration and risk management. They’ll dig into the new roles and expectations for key players such as depositories and investors. They’ll examine the regulations and influential guidelines being announced by member states and the European Securities and Markets Authority (ESMA). And they’ll benchmark progress across the industry as managers move towards becoming AIFMD-compliant.
The series is intended to not only signpost the challenges facing the industry; but provide actionable and practical advice to help managers turn these challenges into opportunities. And, at the end of the series, these articles and insights will be packaged up to create a valuable guide that adds to the body of knowledge on AIFMD.
That is because KPMG professionals believe that the best way to help the industry overcome the challenges related to AIFMD is by sharing industry best practices, experiences and strategies in an open and transparent manner in the hopes that, by advancing our collective understanding, we can catalyze action and protect the ongoing viability of the sector.
On behalf of KPMG’s global AIFMD practice, I welcome you to the AIFMD Insider News and encourage you to contact your local member firm if you would like to explore any of the topics raised in more detail.