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Alternative Market Briefing

Global Perpectives finds AIFMD will cause the death of the traditional hedge fund

Tuesday, May 29, 2012

Beverly Chandler, Opalesque London: Shane Brett, managing director of Global Perspectives has written about the arrival of AIFMD in a paper entitled 'AIFMD & the Death of the traditional Hedge Fund’.

Brett feels that rightly or wrongly hedge funds in mainland Europe have an unenviable reputation. "Despite no Hedge Fund ever having required a public bailout, the EU has used the current economic crisis as a pretext to increase regulation across the industry in Europe" he writes. The most recent, third and final draft version of the AIFM Directive was published in May 2012 and has, Brett feels, reintroduced many of the more prohibitive requirements that were first seen in the original draft but had been successfully lobbied down in the second version.

Brett writes: "Incredibly, this final version has even been criticised by such unlikely sources as ESMA (the EU’s own super regulator) and the ECB but still looks likely to become law across the EU in July 2013. We believe the adoption of AIFMD signals the death of the traditional largely unregulated alternative investment "black-box" which pre-dominated the industry for so long. Instead we are moving towards a more standard and invasive model of financial regulation, similar to the UCITS regime in Europe".

For hedge funds, this......................

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