Transatlantic partners or competitors?
The United States have voiced concerns over the European Union’s proposed Alternative Investment Fund Managers (AIFM) Directive (the Directive). One of the big issues is a fear that the Directive could make it difficult for non EU-funds to raise money from EU investors. At a conference on AIFM organised by Deloitte Luxembourg, Cary Stier, Partner at Deloitte New York explained the transatlantic view. LFF spoke to him after his speech.
What is the view in the US on AIFMD?
"I think there is an awareness challenge, because US managers have been focusing on some challenging market developments in search of alpha for the investor. As a result, there in a process of digesting the US regulation that is provided under the Dodd-Frank-act and I think that has been their primary focus."
What are the main concerns about this Directive in the United States?
"Firms are trying to evaluate their existing structure by determining globally what they want their organisation to look like not only from a people perspective by geography but on the product side. Once they have the chance to think about the Directive and its implications, I think it will dictate decisions they will ultimately make. I don’t think there is a doubt that the Directive is real, I think it’s just giving it the right level of attention. It will be important that those who support this industry, like the depositary and custodian banks, continue to help drive knowledge around this issue, globally."
What will change with this Directive in terms of transparency and investor protection?
"It is intended to provide more transparency for the investor. US managers have been facing this fact since the 2008/2009 crisis. So there has been a focus on how to be more transparent with the investor, how to provide real time data and how to be thought provoking in the data that they provide. I think that will be enhanced globally by the Directive."
How will the AIFM Directive affect UCITS?
"As firms bring in new products, they may decide to change their approach based on certain domiciles in terms of ease of doing business. There will be a focus on the preparedness of domiciles like Luxembourg that will give a comfort level to US managers wanting to bring their product to Europe."
Does AIFM induce more barriers for cross-border business?
"The United States have been very focused on domestic matters, trying to get the economy going. I think that regulators from the US and Europe would like to figure out how to work together to navigate these challenging rules and their implementation. It is to be seen how quickly that can happen given some of the outside distraction and pressure.” CW