Thu, Jun 4, 2020
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Alternative Market Briefing

Other Voices: ESMA proposes formal limits to leverage potentially affecting alternative funds

Tuesday, March 31, 2020

amb
Bill Prew
Bill Prew, CEO of INDOS Financial, a UK-based independent fund depositary and oversight business, has flagged the following new regulatory proposals potentially impacting alternative investment funds:

There was an interesting consultation published by ESMA on 27 March on how regulators should address leverage risks in the Alternative Investment Fund (AIF) industry. The consultation is in response to the recommendations of the European Systemic Risk Board (ESRB) in April 2018 to address liquidity and leverage risk in investment funds (in particular, the extent to which the use of leverage within AIFs contributes to the build-up of systemic risk in the financial system, and to give guidance on macroprudential leverage limits).

The most eye-catching part of the proposals is a requirement that regulators "should impose leverage limits" on funds (or groups of funds) that they consider "pose risks to financial stability".

Whilst AIFMD has always allowed regulators to set leverage limits, to our knowledge regulators have not imposed limits since AIFMD was first introduced in 2014 - managers have been free to set the maximum level of leverage which they believe are "reasonable".

Regulators will need to base their assessments on the Annex IV regulatory reporting they receive from managers. The proposals not only focus on those AIFs that employ substantial leverage (defined by AIFMD as when an ......................

To view our full article Click here

Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing

 



  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. Investing: Millennium hedge fund ups bet against Bank of Ireland, Value rotation was the last thing big funds thought would happen, Al Gore's firm sold Amazon and Microsoft stock. Here's what it bought.[more]

    Millennium hedge fund ups bet against Bank of Ireland From Independent: US hedge fund Millennium International Management has raised its bet against Bank of Ireland's shares. It comes as Davy says 2020 will be a write-off for banks, with losses across Irish lenders of €4bn. M

  2. PE/VC: Private equity in the Covid-19 crisis, Carlyle's Africa dealmakers leave to start their own buyout firm, UK asset managers plan shift to off-market strategies including private equity[more]

    Private equity in the Covid-19 crisis From Morning Star: Private equity investment trusts invest in unquoted companies not yet listed on the stock market. How have they fared in the sell-off? Investment trusts have been caught up in the market turmoil of recent months and private equit

  3. New Launches: Apeira Capital seeks $200m for hedge fund-like bets, PIMCO filing reveals ESG fund launch could be ahead, BEA Systems co-founder launches venture fund, Salesforce Ventures launches $125m Europe Trailblazer Fund, The D. E. Shaw group closes first onshore China investment fund, Legg Mason and ClearBridge launch non-transparent ETF, Hong Kong-based asset manager MaiCapital launches actively managed bitcoin hedge fund[more]

    Apeira Capital seeks $200m for hedge fund-like bets From Bloomberg: Natalie Hwang, the former head of Simon Property Group Inc.'s venture capital arm, has launched a new firm and is seeking $200 million for a debut fund. Hwang has been discussing the vehicle with prospective investors, ac

  4. New Launches: Hedge fund Angelo Gordon raising $1.5bn for distressed energy debt, Amundi unveils eight new funds as part of ESG ETF range push, Mezzanine Management gears up for direct lending fund[more]

    Hedge fund Angelo Gordon raising $1.5bn for distressed energy debt From Reuters: Hedge fund Angelo Gordon & Co aims to raise as much as $1.5 billion to buy the debt of distressed oil and gas companies, according to a person familiar with the matter and an investor presentation viewed by R

  5. Tech: Robos fail their first big test, 'Video is fine': Venture capitalists find the benefits in digital due diligence[more]

    Robos fail their first big test From Advisor Perspectives: Robo-advisors faced their first big challenge with the bear market in the first quarter of 2020. They lost, and that is an ominous sign for the future of automated advice. All robos employ a degree of active management. They