EU Storm Over for Alternative Investment Funds?
September 18, 2011
Senior Vice President
The European Union’s highly controversial Alternative Investment Fund Managers (AIFM) directive quietly came into force in July when most of us were thinking holiday thoughts.
With the beach a distant memory, it is time to take stock of what precisely this new legislation means for the alternative investment industry, spanning sectors as disparate as hedge funds, private equity, real estate, venture capital, and other non- Ucits investment funds.
... can efforts to strengthen the reputation of the industry and enhance transparency towards politicians, regulators and the public at large be scaled back?
Under the directive, these funds will be regulated for the first time at a pan-European Union level. The directive, which will require authorisation by national regulators, will lead to ongoing supervision of capital, conduct of business (risk management, conflicts of interests, liquidity, valuation, delegation, depositories, reporting, leverage limitation, private equity acquisitions) and marketing of shares or units from within and outside the EU.
Is it safe to assume that after the long, hard slog to make the directive as workable as possible the sector can now set about implementing the requirements, adapting the necessary processes and disclosures, and generally getting back to business as usual?
In other words, from the industry perspective, has this storm blown over and can efforts to strengthen the reputation of the industry and enhance transparency towards politicians, regulators and the public at large be scaled back?
Unfortunately, this may not be the case.