According to a number of French hedge funds and the securities regulator AMF, the AIFMD could encourage fund managers to bring offshore hedge funds onshore. This could, in turn, lead to greater interest from investors such as pension funds for alternative strategies, experts said.
Sylvie Dehove, deputy chief investment officer at Amundi Alternative Investments, said: "We need to demystify hedge funds. We need to explain exactly where the performance is coming from, to discuss liquidity and transparency, especially in the regulated environment – in a word, gain confidence. In this respect, the AIFMD is a good answer. The arrival of new prudential Directives may help boost alternative offers by waiving political constraints some institutional investors had."
French hedge fund managers said some of the largest funds of funds had shifted their model from offshore to European regulated, 100 per cent-onshore framework. However, they also recognised that further steps were required in the implementation of the AIFMD to win back institutions' trust and make destinations such as France more attractive.
Patrice Bergé-Vincent, head of the asset management regulation division at French securities regulator AMF, pointed out that, in the coming years, the industry would make a clearer distinction between UCITS and AIFM. He said UCITS products would be more directed towards retail investors and alternative investment funds reserved for the most sophisticated investors.
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