AIFMD – taking the fun out of funds?

The Alternative Investment Fund Managers Directive was transposed into UK law last summer. With these market developments, we are looking to invest in graduates who wish to advance in a career within fund accounting and auditing.

Last summer, the Alternative Investment Fund Managers Directive (AIFMD) was transposed into UK law, off the back of its publication in the Office Journal of the European Union.

The directive is concerned with the regulation of AIF managers, covering the marketing and managing the likes of real estate, private equity and hedge funds – its introduction is seeking to address the perceived regulatory gap between these funds and mutual/pension funds.

What does this mean for managers?

The frustration for managers is two-fold:

  • The ‘don’t-fix-what-isn’t-broken’ mentality brought on by the AIFMD is fuelled further by the anxiety among managers that, as with any new regulation, it risks a reduction in competitive advantage in what is a lucrative market.
  • Managers under the AIFMD’s scope would have to restructure whole business models to comply with reporting, remuneration and risk and appoint a depositary – a whole new entity under the regulation.

Reflective of these two points, there has been a growing increase in the fund administration market as a whole. Private Equity and Real Estate managers are now choosing to outsource the activities of structuring and running these schemes to specialist firms, of who have diversified their services further by becoming independent depositaries.

Under the AIFMD, fund administrators monitor assets on an on-going basis, acting as super-charged custodians – reconciling cash movements, and providing independent verification of the fund and the managers that hold them.

With new regulations come new professionals

The directive however is mutually beneficial for two players in the market.

Graduates can jump aboard the wave of openings the directive has brought about, and gain a foothold in their financial services career.

Conversely, fund administration firms are looking to invest in graduates who wish to advance in a career within fund accounting and auditing as the market develops.

Grovelands have been keeping a close eye on the developments in the market since the AIFMD implementation deadline passed back in January of this year, and have witnessed a growing demand for professionals in fund accounting and depositary services in the past 6 months.

We’re keen to hear from both fund administrators and recent graduates – please get in touch on 01273 651 500.

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