London's alternative investment fund managers are finally feeling the benefits of the Alternative Investment Fund Managers' Directive (AIFMD), as it opens up new pathways into Europe.
In the capital, 61% of alternative investment fund managers feel the regulation has created new opportunities in Europe, according to research by consultancy and service provider, Kneip.
The survey, now in its third year, also showed that well over half of firms based in Luxembourg agree that the AIFMD has been beneficial in opening new business opportunities in other European markets.
However, whilst European fund managers are seeing the advantages of the AIFMD, their US counterparts are less enthusiastic. The research revealed that only 35% of New York-based alternative investment fund managers feel that the AIFMD has brought new prospects in Europe.
The research focused on alternative investment fund managers domiciled in New York, Luxembourg and London, and highlighted that for non-EU funds the regulation is still in its early stages and distribution remains a complex country-by-country process.
Mario Mantrisi, a senior advisor at Kneip, says: "While compliance with the AIFMD has not come without its challenges, it is encouraging that EU firms already perceive its benefits."
Though London firms are enjoying the passporting function of the Directive, the research also shows that the AIFMD is draining resources internally, with 44% of respondents feeling that it distracts them from core business functions. This represents a 10% increase on last year.
To manage the heavier workload, 65% of London firms have employed more staff to cope with AIFMD, while 48% of Luxembourg firms and 68% of those in New York have done the same.
In the UK capital, outsourcing AIFMD reporting-related functions has also been popular, with 67% of alternative fund managers in London turning to outsourcing, compared to only 28% in New York and 38% in Luxembourg.
Mantrisi concludes: "'If firms put in place the on-going data management processes that are required for this complex regulation, in time the process will become less of a headache for the industry resulting in smoother submissions to regulators."
The next AIFMD reporting deadline takes place at the end of January.
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