Small firms “grin and bear it” over AIFMD

Survey2Managers of UK alternative investment funds that are below the threshold of the Alternative Investment Fund Managers Directive (AIFMD) are nevertheless applying to the regulator to become AIFMD-ready. According to a survey by accountant Moore Stephens of its clients, 90% of sub-threshold managers are either implementing the directive or have submitted applications to the Financial Conduct Authority, despite the cost of compliance. “It seems to be the case that smaller firms are having to grin and bear it,” says Kelly Sheppard, partner in Moore Stephens’ financial services industry group. According to the AIFMD, funds with less than €100 million under management, or less than €500 million if the assets are unleveraged, are subject to a lighter compliance regime than larger funds. Avoiding the full requirements of the directive has obvious advantages, yet the drawback is that funds would be unable to grow beyond the threshold unless they sought full compliance. According to Sheppard, “the preparedness of sub-threshold managers is no surprise, with the prospect for future growth seemingly outweighing the arduous and costly requirements of the directive”. The clients responded anonymously and Moore Stephens did not say how many were in the sample. ©2014 funds europe

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