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Hames spoke at the Guernsey Funds Masterclass in London on the impact of Brexit on fundraising. Phil Bartram, Partner at Travers Smith, agreed that the reality of Brexit had called into question what the best way to market to European investors would be going forward.
Under the Alternative Investment Fund Managers Directive (AIFMD), investment managers based in the UK are entitled to a passport with which to access European investors. Without it, they would rely on the pre-existing national private placement regimes (NPPRs), which many jurisdictions are considering phasing out and replacing with the passport, despite NPPR offering a more efficient route to market for many investment managers.
“I think it’s worth emphasising the point that even before the referendum had occurred, industry sentiment had become more ambiguous as to what it really wanted,” said Hames.
“At the beginning of the whole AIFMD passport, industry sentiment was very much that the passport was the silver lining in the cloud. Three or four years into the regime and a closer inspection of what the silver lining actually was, people have already started to say, ‘well, could we keep both systems running for a bit longer please, and perhaps not put all of our eggs into this particular basket?’
Bartram, who said that a ‘third-country passport was not a panacea for the UK industry as we go into Brexit’, described his experience in relation to non-EU funds utilising NPPR as largely positive.
“I personally think that it’s a very successful, very workable route to market. It’s predictable and certain for the time being. Not every European jurisdiction has a national private placement regime, but all of the important ones, from the perspective of having significant numbers of active limited partners and investors, do have them.”