Carne Group becomes first AIFMD compliant independent management company

21 Aug, 2013

Carne Group has become the first AIFMD-compliant independent management company in the EU following approval from the Central Bank of Ireland.

The firm will provide risk management oversight to EU AIFs hoping to take advantage of the passporting regime across the EU. Carne’s risk management team will be led by Gerry Grimes and Albert Prendville.

“This will appeal to non-EU managers hoping to become AIFMD compliant because it means they will not need to have the bricks and mortar required to obtain an AIFMD license, as we will be the AIFM for them. Our offering will enable the non-EU manager to launch Qualifying Alternative Investment Funds (QAIFs) in Ireland, which will allow that manager to market this product across the EU,” said Aymeric Lechartier, managing director at Carne.

AIFMD permits AIFMs to delegate either their risk management or portfolio management to an approved investment manager. “This will allow managers – assuming they have service providers in place – to have their fund approved within 24 hours as a QAIF and market their AIF throughout the EU,” commented Lechartier.

Carne Group has one QAIF live and three other AIFMD compliant projects in the approval process, and is currently in talks with several others. “Obviously, we have to be careful about who we on-board, and all managers will have to be regulated in their relevant jurisdictions, as well as have proper infrastructure and risk management processes in place. We are not shunning any particular strategies but we would obviously have to devote more of our risk management resources to a daily systematic fund than a fund of funds, for example” said Lechartier.

A number of non-EU managers are adopting a “wait and see” approach to AIFMD with many holding back any marketing initiatives until the regulations are clearer, particularly around the issue of remuneration. Furthermore, the European investor base has shrivelled since the financial crisis and the majority of hedge funds are focusing most of their marketing efforts in the US.

Despite this, optimists still believe AIFMD could become a recognisable brand down the line. Fifty-four per-cent of managers told a BNY Mellon survey they expected to see an increase in capital invested in alternative funds because of AIFMD.

Respondents cited the ability to distribute their products more freely and widely as being the key drivers for this growth. “Managers will be able to sell AIFs across the EU in a fashion similar to Ucits. They will be able to proactively promote their products and this presents significant opportunities for them,” said Lechartier.