Emerging managers have identified marketing and brand awareness as the biggest challenge they face in the current environment, with many planning to increase funds under management considerably in the next five years.
The Funds Europe ‘Emerging Managers Survey’ – which gathered the opinions of alternative investment fund managers with less than £300 million in assets – revealed many new funds also find fundraising difficult.
The survey found that 63% of respondents have assets under management below €100 million but have plans to increase capital considerably over the next five years, with 21% of respondents targeting up to €250 million and 38% aiming for €250-500 million.
Elliot Refson, head of funds at Jersey Finance, said: “The survey suggests the biggest challenges facing emerging managers are, unsurprisingly, marketing/brand awareness, fundraising, regulation and, as always, cost.”
“The marketing, regulatory requirement costs and the time to market can all be mitigated by choosing the right domicile.”
An offshore fund domicile can offer emerging managers significant benefits that will help keep costs and the regulatory burden low at a time when every penny counts, Refson said.
“For example, managers looking to market their funds into the EU must comply with AIFMD. But there are different ways of doing this,” he explained: “A manager can establish a fully compliant AIFMD structure in a jurisdiction like Luxembourg or Dublin. Alternatively, an offshore jurisdiction like Jersey benefits from an opt-in/opt-out approach to AIFMD.”
“Being outside the EU means Jersey is not subject to AIFMD, and funds domiciled here can target investment from the rest of the world and the EU through the national private placement regime (NPPR).”
Refson added: “The reality is that, according to the EU’s own statistics, only 3% of alternative investment fund managers are registered to market their funds in more than three European jurisdictions.”
“So, if a manager is one of the 97% that doesn’t plan on marketing that widely, Jersey and the NPPR can offer a far more streamlined, cost-effective and efficient solution outside the full scope of AIFMD.”
The Funds Europe ‘Emerging Manager Survey’ – in association with Jersey Finance – gathered the views of more than 100 alternative fund managers from around the world to discover the most important issues facing the industry.
