A study on the ‘Impact of AIFMD on the European & US alternative fund industries’, sponsored by fund and corporate service provider Crestbridge, surveyed US managers with combined assets under management of $306bn (£212bn, €275bn).
“There has been some comment on what American managers think about AIFMD, but until now no research has been done on this topic,” said Graeme McArthur, chief executive of Crestbridge.
The survey focused on how AIFMD has impacted approaches across the hedge, private equity, infrastructure, and real estate sectors to the European investor landscape.
The research found:
- AIFMD has not caused US managers to take a strategic decision to expand into Europe or stay out of it. Instead, US managers continue to take an opportunistic, investor-led approach to Europe;
- Most US managers are focusing on just one or two European markets and private placement is overwhelmingly the preferred option for these managers;
- US managers said they would become AIFMD compliant if there were sufficient investors for their funds to make it worthwhile, though AIFMD has raised the bar in terms of what ‘sufficient’ means;
- Particularly in cases where funds are marketed into more than one market, management companies (ManCo) are proving a popular platform for accessing European capital. A third (36%) of US managers active in the European market were using or were considering using a ManCo platform and growth in these structures is expected to continue;
- The biggest concerns amongst US managers surrounding AIFMD were remuneration disclosure provisions and regulatory costs.
Few wholesale system changes
Earlier research carried out at the end of last year, found that, although AIFMD has required European managers to include extra items in their risk reporting, the majority had not been required to make wholesale changes to their systems.
"Rather than AIFMD causing a revolution, the changes it is bringing about are part of an ongoing long-term process."
McArthur continued: “Overall, the indications across Europe and the US are that, rather than AIFMD causing a revolution, the changes it is bringing about are part of an ongoing long-term process.
“Whilst European managers are needing to focus more on risk, governance and reporting; it seems that for many US managers Europe is not a priority and that AIFMD is having relatively little impact.
“What is interesting, particularly from the point of view of a service provider with operations in both onshore and offshore locations, is that both the ManCo and private placement routes into Europe are being used by those US managers with European interests, with the rise of the ManCo set to be the most significant structural change brought about by AIFMD,” he said.