The EU Alternative Investment Fund Managers Directive (AIFMD) came into play on 22 July 2013. Five years on Matt Tostevin and Fèmy Mouftaou in JTC’s funds team in the Channel Islands and Luxembourg, reflect on how the regulation has impacted European funds business and what the future might hold…
Has the AIFMD panned out as expected?
Matt: In the run up to its introduction, there was a lot of apprehension about what AIFMD might mean for European alternatives. Ultimately, though, the industry has responded and adapted pretty well, and actually it has provided those managers, service providers and jurisdictions that have been forward-thinking and innovative with some opportunities.
Whether or not the directive has achieved what it set out to do – work in favour of investors in the aftermath of the global financial crisis – is another matter. Yes, it’s added some protection and transparency for investors, but it’s also added layers of administration, red-tape and ultimately cost, which has inevitably eaten into returns. That’s clearly not in anyone’s interest. Indeed, one of the key areas of focus was executive remuneration and conflicts of interest, which have been more effectively impacted by changes to individual countries’ domestic legislation and shareholder pressure.
