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KPMG: Alternative Fund Managers Need to Prepare for the AIFM

By Rob Starr, Content Manager,

The Alternative Investment Fund Managers Directive (AIFMD) will have wide-reaching and long-term implications for AIFMs required to achieve compliance by 22 July, 2013. A KPMG International survey of more than 70 AIFMs reveals nearly half have not taken any concrete steps to analyze the impacts the AIFMD will have on their businesses or to make changes to their operations despite the looming implementation deadline.

Last Boarding Call: An overview of the alternative industry’s preparedness for AIFMD: finds that:

  • Just 52 percent of AIFMs have conducted an impact analysis that takes into account the advice from the European Securities and Markets Authority (ESMA), which was published in November 2011.
  • 63 percent of AIFMs have not appointed a depositary, a key requirement of the legislation.
  • Nearly half (45 percent) of AIFMs surveyed say they have not yet considered how the Directive’s remuneration requirements will affect their businesses.
  • Two-thirds (66 percent) are waiting to see what is involved in the EU passport before deciding whether or not to use it.

For many AIFMs that continue to delay preparations for the AIFMD, the result will be operational problems, higher costs and the potential loss of clients. The larger the firm, the more pronounced these implications are likely to be, given their higher risk profiles, higher flows and the challenges they may have finding a depositary.

“Every asset manager worldwide who raises capital in the EU has to comply with AIFMD, including alternative investment managers based in the U.S.” said Mikael Johnson, Lead Partner of Alternative Investments for KPMG LLP U.S. “Yet many of these firms have taken no significant action, with the July 2013 deadline fast approaching. The time to prepare is now. Delaying preparations any longer may have significant negative impacts on their operations, fundraising activities and long-term profitability.”

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