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Bailey McCann, Opalesque New York:

Over two-thirds (67%) of alternative investment fund managers believe the prospect of regulatory arbitrage between European Union member states seeking to attract business is likely to grow over the next two years, according to a new study.

Intertrust interviewed over 100 alternative investment fund managers in private equity, real estate, hedge and infrastructure based in Europe, North America, the Middle East and Asia about the benefits and challenges generated by AIFMD since its introduction in 2011.

The research reveals that regulatory arbitrage has muddied the waters for many investors, which has led to widespread unfamiliarity when it comes to the practical application of the rules. 60% of respondents agreed that variances of AIFMD interpretation between different EU member states has created the biggest knowledge gap among non-EU AIFMs.

"Regulatory arbitrage between different EU countries vying for new business is one of the unintended consequences of AIFMD and the perception is this will continue to intensify. This has made an already complex piece of regulation even harder to understand, particularly for non-EU managers looking to set up AIFs in the region. It's not surprising that investors want AIFMD II to bring an end to these variances in how the rules are interpreted," said Ciara Smith, Head of Regulatory and Compliance Services at Intertrust Group. "It's clear that although AIFMD has become largely normalised......................

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