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Yet the EU remains attractive to US alternative investment managers, particularly post-Brexit. Many investors in the EU and the UK are seeking opportunities to invest in US funds and US strategies – and demand is likely to remain high during a protracted period of uncertainty following Brexit.
So how can US managers access the lucrative EU market and reduce the barriers to entry? Specifically how can they manage the costs, resources and risk concerns that come with complying with the AIFMD?
The answer is to consider partnering with a trusted third-party service provider as a way of testing the waters before developing a full-fledged alternative investment fund manager (AIFM) presence later. The more regulatory risk and compliance functions that can be outsourced, the less managers have to worry about what changes to make to their operations and business models – and the better chance they have to focus on delivering alpha.
Maitland was the first fund administrator to come to market (in 2014) with a powerful end-to-end AIFMD compliant solution in Luxembourg. The solution comprises a Management Company (ManCo) and fund product platform.
US Managers will also be interested to hear about the Reserved Alternative Investment Fund (RAIF), a new investment fund product passed by the Luxembourg Parliament in July 2016 which makes the EU "fortress" a whole lot less intimidating.
The RAIF is a game-changer as it vastly shortens time-to-market, brings certain tax advantages and provides easy access to the marketing passport provided by the AIFMD.
Aimed specifically at "well-informed investors", the RAIF removes the double layer of regulation imposed at both the ManCo and fund level.