Successful AIFMD implementation: French AIFMs comfortably meet the 22 July 2014 deadline

22 July 2014

One year after France transposed the Alternative Investment Fund Managers Directive (AIFMD), more than 200 management companies have been authorised by the securities regulator, Autorité des Marchés Financiers (AMF).

At the end of 2013, French AIFs represented assets worth €900 billion and 9,000 funds (while UCITS represented assets worth €600 billion and 3,000 funds and individual mandates were worth a further €1,500 billion). The success of the implementation of the AIFMD in France can be explained by a combination of factors:

• The regulatory framework that already existed for non-UCITS funds and managers was very similar to the one laid down by the AIFMD. This facilitated the implementation of the new framework in terms of time and cost, thereby benefiting investors and making French funds and their managers even more competitive; 
• The AMF took advantage of the transposition to streamline the range of French funds. In particular, it created Professional Specialised Funds (PSFs) specifically for    professional investors. PSFs offer total flexibility, notably as regards leverage and eligible assets, which are contractually defined with clients;
• The AMF allows French management companies to hold a Super-ManCo status, i.e. to manage both UCITS and AIFs, in order to optimise their organisational and structural costs;  
• A totally paperless online procedure was introduced by the AMF for filing authorisation applications quickly and efficiently.

As early as 2013, French firms were quick to understand the commercial advantages of being authorised as AIFM, which entitles them to both a European passport and a brand increasingly sought for by professional clients in Europe and the rest of the world. For that reason a large number of management companies not subject to the new authorisation requirement nevertheless applied for it. Many companies in the scope of the Directive beat the 22 July 2014 authorisation deadline. More generally, the efforts made by French management companies reflect a proactive strategy of gaining global market share. For example (as at end-2013):

• Nearly 3,000 French-domiciled funds were registered worldwide, including in Singapore, Taiwan, Mexico and Peru;
• French management companies were managing assets worth more than €400 billion for foreign investors.  

 

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