Less than a quarter of global fund managers surveyed with US$300 billion (€220 billion) of assets say they will deliver alternative funds through the Ucits channel rather than in the new Alternative Investment Fund Managers Directive (AIFMD) framework.
However, many of the surveyed managers do not feel the AIFMD will affect the growth of alternative Ucits funds.
Of 56 managers surveyed about AIFMD readiness, 17% say they prefer to maintain the Ucits access route.
A number of firms in the Alceda and Kepler Partners survey were still undecided on which route to take, with 8% saying they were considering using third-party service providers and 4% saying they would continue using the private placement route, though this is due to expire in 2018.
Four firms say they will not market within the EU.
Georg Reutter, partner at Kepler Partners, says it is encouraging that the majority of managers do not think that AIFMD will impact their strategy nor that it will negatively impact the continued growth of alternative Ucits funds.
But he says that alternative managers outside of Europe were potentially “sleepwalking” into the unknown.
A broader survey finding was of the quite low state of preparedness for the AIFMD. Of the 56 alternative fund managers from Asia, Europe and the US, 47% say they had not registered under the directive. Thirty-two per cent of the firms say they were compliant and 19% said they planned to submit an application before the July 22 deadline.
European managers responding to the survey are generally well prepared, while managers in the rest of the world “appear blindfolded”.
Depositary costs, remuneration and the end of private placement are cited as the biggest threat to business under the AIFMD by over a quarter of respondents. But over 40% believe in the benefits of a EU-wide distribution passport and increased investor confidence under the AIFMD brand. In particular, this group cites the opportunity to extend both the product range and the distribution of their products across Europe.
There is also the perception that AIFMD would lead to more offshore funds moving onshore.
Reutter says: “It’s clear that the general understanding of the implications of AIFMD on the alternative fund management industry is low, with 41% of respondents to our survey stating that they have a limited understanding.
“In particular we found that alternative asset managers headquarted outside Europe are potentially sleepwalking into the unknown despite the potential impact on their business.”
Alceda is a fund structuring specialist in Europe and Kepler Partners is a London-based research firm.
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