Fund investors demand regulatory-compliant products

gavellaw booksFund investors are showing an appetite for products that fully comply with new regulations, a poll of around 50 fund managers and consultants shows.

More than a quarter (28%) of respondents said they believed investors in funds are now demanding products fully compliant with new regulations – a trend that a specialist says will have a significant impact on product development.

Ian Headon, head of depositary, regulatory and technical services at Northern Trust, which carried out the poll, says that investment managers are seeing an increasing demand from investors for a combination of fully regulated and traditional offshore products.

"This is a gradual, incremental change in investor behavior and will have a significant impact on the evolution of fund managers' product offerings – regulation is here to stay, but this is a marathon, not a sprint," Headon says.

While the Northern Trust poll revealed an increased demand for compliant products, the majority of respondents (65%) still believed that their investors viewed the Alternative Investment Fund Manager Directive (AIFMD) as primarily a compliance exercise.

Robert Angel, head of regulatory services for Europe, the Middle East and Africa at Northern Trust, says that, although AIFMD implementation may be nearing completion, the regulatory landscape is still evolving and fund managers must look to new developments on the horizon.

"The successful managers will be the ones that break away from the pack and get ahead of the regulatory trends," he adds.

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