Luxembourg yesterday became the third country after the Netherlands and Germany to adopt the law transposing the Alternative Investment Fund Managers Directive (AIFMD) intonational law.
The Luxembourg law covers the creation of a limited partnership structure, which the Association of the Luxembourg Fund Industry (Alfi) says offers flexibility and security, and adds to the country’s offering.
This is likely to appeal to investors familiar with the Anglo-Saxon partnership regime.
In addition, the Luxembourg law provides for additional clarifications regarding the taxation of carried interest.
Although under the AIFMD asset managers will be allowed to sell their funds into the entire European market using a passport, concerns over cost are mounting.
While fund centres like Luxembourg and Ireland say they aim to build upon the success of Ucits, there is evidence that asset managers will consider setting up alternative investment funds offshore to put them outside the scope of the AIFMD.
Software provider Multifonds recently surveyed 64 managers and administrators that manage and administer assets exceeding $13 trillion (€9.7 trillion) and $28 trillion, respectively.
It found that 77% of respondents may take this offshore option when the regulation enters into force.
A similar number, 74%, say the costs of implementing the directive have risen since the European Commission published the Level II implementation text for the directive in December last year.
However, Marc Saluzzi, chairman of Alfi, says the new regulatory framework will provide the global alternatives industry with a solution that “combines investor protection with well-established industry practices at a reasonable cost”.
Despite industry efforts and a rapidly approaching implementation deadline of July 22, consultancy Investit says many asset managers are still not prepared.
The biggest topics asset managers struggle with are remuneration and the technical details of reporting.
Investit polled 11 investment management firms with combined assets under management of £2 trillion (€2.3 trillion).
According to the findings, 84% are not prepared for AIFMD. Of this portion, 67% are only fairly prepared and informed to be deemed AIFMD-compliant in the near future. The remining 17% are unprepared.
©2013 funds europe