AIFMD will lead to greater convergence between hedge funds and long-only vehicles
Two thirds of industry professionals with more than $16 trillion in Assets under Administration (AuA) believe AIFMD will accelerate the convergence of long-only investment vehicles and hedge funds, according to a survey by Multifonds, a platform and software provider to administrators.
The convergence has also been driven by investors. Institutional investors such as pension funds have increasingly embraced hedge funds forcing managers to ape their long-only counterparts through bolstering their risk management, liquidity terms and transparency.
In turn, retail investors’ interest in absolute return vehicles has been growing steadily prompting some mutual funds to adopt hedge fund characteristics such as performance fees and associated investor equalisation.
Despite the looming July 2013 AIFMD deadline, 20% of respondents said their preparations were behind schedule “and would not be ready within the next 12 months.” Depositary liability is viewed as the most pressing issue by 57% of respondents, followed by the operational requirements and risk and liquidity management criteria (both 45%).
However, 63% said AIFMD would make the EU a more attractive jurisdiction for alternative fund investors while 72% believed non-EU managers would establish European operations to take advantage of AIFMD.
The survey polled 51 administrators, global custodians and asset managers globally.