Comparisons between US and European practices for running liquid alternative funds are considered in a guide published by the Alternative Investment Management Association (Aima).
The guide, published in association with JP Morgan and KPMG, considers some of the different requirements and practices affecting funds established in various domiciles. Ireland, Luxembourg and the US are among the most common locations for liquid alternative funds.
There has been in a steady growth in liquid alternative funds and the guide directly compares European Ucits and US ’40 Act fund structures.
The guide also covers issues ranging from investment strategy restrictions, liquidity, operational and governance matters, distribution, tax and financial reporting, the role of service providers and revenue streams and costs.
“Investment managers that are used to the regulatory environment of private funds should expect to face new operational and regulatory challenges in a liquid alternative fund. But they are also likely to find significant new growth opportunities at a time when many individual investors, pension funds and other institutional investors are looking for ways to increase the liquidity and risk-adjusted performance of their portfolios,’ says Jack Inglis, chief executive officer of Aima.
The full guide is available only to Aima members, but an executive summary is available here.
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