UK’s Frostrow Capital seeks AIFM approval
Frostrow Capital, the services firm providing non-investment functions to London Stock Exchange listed investment companies, is seeking authorisation to perform the role of Alternative Investment Fund Manager under the AIFM Directive.
The requirement for authorisation stems from Frostrow’s provision of risk management services, in addition to administrative services. Under AIFMD, investment companies must appoint an AIFM that is responsible for investment management and risk management.
Successful authorisation should enable the company to offer its services to investment company boards considering providers of AIFM functions, Frostrow said.
Alastair Smith, managing partner at Frostrow Capital, said: “We believe that an attractive option for investment company boards is to appoint a party who is independent from the fund management team as their company’s AIFM. Having a separate entity providing this function removes the potential for a conflict of interest should the fund management team be in the direct employment of the AIFM itself.”
“Frostrow further believes that a third party AIFM could be beneficial to investment managers that do not want to take on the extra regulatory burden that being an AIFM gives rise to, overseas managers that are promoting funds in the UK that do not wish to become regulated by the FCA, or for investment company boards who wish to maintain their independence from their fund management team.”