Convergence of long only and hedge funds to accelerate under AIFMD – survey

A survey of industry professionals responsible for more than $16trn of assets under administration has found that more than two thirds – 69% – believe AIFMD will accelerate the convergence of long only and hedge funds.

Published by Multifonds, the platform and software supplier to administrators, the survey also found that one in five, 20%, of respondents felt they were behind schedule on implementing the Directive, which has a deadline of 22 July 2013.

Depositary liability is seen as the biggest challenge stemming from AIFMD, with operational requirements and risk and liquidity management closely following.

A solid majority – 63% of respondends – said that AIFMD would make Europe a more attractive jurisdiction for alternative fund managers, while 72% said they thought non-EU managers would set up European operations to take advantage of the Directive.

Keith Hale, Multifonds’ executive vice president for client and business development (pictured), said: “It is widely recognised that institutional investors, such as pension funds, are increasing their hedge fund allocations to diversify their asset class exposure, reduce the impact of market volatility and potentially boost returns. They expect higher risk management, transparency and liquidity resulting in alternative fund products that have more traditional, long-only fund characteristics. Similarly retail orientated absolute return funds, such as alternative Ucits, are driving traditional funds to incorporate hedge fund characteristics such as performance fees. These drivers aligned with the AFIMD will accelerate the convergence between long-only and hedge funds.”

The survey was carried out in June 2012 and received 51 responses from the global fund administration industry. Respondents included third-party administrators, global custodians/ fund administrators and asset managers, and a mix of both traditional and alternative funds, including hedge funds, commodities, private equity, real estate, long only/ mutual funds and unit trusts. Respondents were based in the UK, Channel Islands, Finland, France, Germany, Hong Kong, India, Iceland, Luxembourg, South Africa and US.

Click here to read the full report: Multifonds Convergence Survey


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