Sat, Aug 13, 2022
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Industry Updates

Preqin: Only 15% of US hedge fund managers are now AIFMD compliant

Tuesday, July 21, 2015
Opalesque Industry Update - Preqin’s latest survey of global hedge fund managers reveals that most UK- and Europe-based hedge fund managers are AIFMD-compliant. By contrast, there has been slow uptake among firms beyond the EU’s borders; a quarter of hedge fund managers based across Asia and Rest of World currently comply, and only 15% of firms based in the US. A large proportion (42%) of fund managers based outside the EU do not plan to raise capital from EU investors in the near future; of this group, 59% are avoiding the region due to concerns about the AIFMD. Many managers based outside the EU are relying on investors to approach them through reverse solicitation. Even so, 38% of US managers have chosen to avoid the EU completely, with most citing compliance costs and the risks arising from uncertainty and lack of guidance surrounding the directive.

Other Key Hedge Fund AIFMD Stats:

  • Drop in Negative Attitudes: The negativity surrounding the AIFMD has reduced over the past six months, with 45% of respondents to Preqin’s June 2015 survey believing the Directive will change the hedge fund landscape for the worse, compared to 58% as of December 2014.

  • Split Views in the EU: Despite the majority of UK firms being compliant, not a single UK hedge fund manager surveyed expected the AIFMD to have a positive impact on their firm in the coming year. This compares to 55% of non-UK EU hedge funds that believe it will have a positive impact.

  • Compliance Rates: Only 15% of US hedge fund managers, and a quarter of firms across Asia and Rest of World, are currently compliant with the AIFMD. This compares with almost all (90%) of UK-based firms, and 82% of fund managers across the rest of Europe.

  • Costs of Compliance: Two-thirds of firms globally reported that the costs of complying with the AIFMD are higher than expected. No fund managers reported the costs as lower than expected.

  • Size Matters: The largest fund managers are more likely to be compliant with the AIFMD regulation; 46% of fund managers with more than $1bn in AUM are compliant, compared to 19% of those with less than $100mn. Forty percent of firms with less than $100mn in AUM will not be marketing a fund within the EU at all.

Comment:

“As we approach the 22nd July anniversary of its implementation, the AIFMD has had a varied effect on the hedge fund industry. While general negativity towards the regulation has fallen over the past six months, 45% of fund managers still believe the AIFMD will change the industry for the worse, and only 23% feel it will have a positive impact. Although in Europe most hedge funds are AIFMD-compliant, only a relatively small number of fund managers from beyond the EU’s borders have acquired compliance status. Despite having one of the highest levels of compliance (90%), not a single UK-based fund manager felt the directive will have a positive impact on their business.

Many non-EU fund managers are choosing to avoid investment from the region completely, which may result in a reduced choice of funds available for investment for EU-based investors. The leading concern hedge fund managers have about the new regulation is the increased costs of complying with the EU directive, with two thirds of those managers that have acquired the passport stating the costs have been higher than they originally expected.”

Amy Bensted – Head of Hedge Fund Products, Preqin

Press Release

What do you think?

   Use "anonymous" as my name    |   Alert me via email on new comments   |   
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. Other Voices: ESG exuberance is at all-time highs. But will investors buy?[more]

    As investors increase their focus on mission-based investing, they continue to grapple with ESG and what it means to them. By David Shalom, Director of Capital Introductions at Pershing Innovation. New investment solutions. That's how managers deliver value and attract new inve

  2. Alts managers sitting on over $2.5tn+ of dry powder[more]

    Laxman Pai, Opalesque Asia: In the current rising interest rate environment, investment activity in the private markets has continued to grow, revealed a study. "With alts managers sitting on over $2.5T+ of dry powder and continuing to enjoy premium valuations and interest rates on a prec

  3. Opalesque Exclusive: Hong Kong manager expects additional tailwind in Asian markets[more]

    B. G., Opalesque Geneva: The Asia equity markets have not been at their best so far this year, with the MSCI Asia index down almost 13% YTD, but many managers remain buoyant about the region, as in

  4. Opalesque Exclusive: Emerging markets persist despite headwinds[more]

    Bailey McCann, Opalesque New York: Emerging markets have been under significant pressure since the start of the year, but there are some nascent trends that suggest that things could be getting better. Emerging markets firm Gramercy Fund Management recently released its third quarter outlook and

  5. Opalesque Exclusive: Castle Hall's DiligenceExchange free Transparency Reports cover 100 managers with $10tn of assets[more]

    Matthias Knab, Opalesque for New Managers: Managers and investors can get free access to DiligenceExchange here: https://bit.ly/DXCInfo Castle Hall, the Du