Industry “unprepared” for AIFMD

The asset management industry is widely unprepared for the impending Alternative Investment Fund Managers’ Directive, whilst management fees are likely to increase and profitability to be hit, a new poll finds

Only 2% of the asset management industry has implemented plans to cope with new regulations it faces from the EU, the Alternative Investment Fund Managers’ Directive (AIFMD), a poll by PwC has found.

Of 186 senior industry figures from the hedge fund, private equity and real estate sectors, only 16% have set up a dedicated working group to consider the implications and formulate how they should respond.

Meanwhile, 41% of respondents expect the AIFMD to result in increased management fees and over half of asset managers expect profitability to be hit.

The directive, which is expected to place a considerable burden upon the industry, is likely to be approved in the European Parliament relatively quickly. Only Britain and France have voiced opposition to the latest stage of the new regulations and both are willing to reach a compromise.

A better light is shed on the impact of the directive by the Luxembourg Bankers’ Association, however.

Benoît Sauvage, a financial markets and securities adviser at the body which represents banks and financial intermediaries in Luxembourg, says the directive will have a positive impact on the country’s depositary and administrative activities, whilst refuting the notion that fund managers will be driven away from London by its impact.

Sauvage also points out that large fund managers have already tended to convert their funds to become UCITS compliant or to the local SICAR prior to the AIFMD.

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