The IA shows that it has not been possible to identify the proportion of funds currently domiciled outside the EU that will re-domicile into the EU in order to continue to be marketed to EU investors.
Charles River Associates (CRA) was asked by the Financial Services Authority (FSA) to conduct an assessment on the impact of the proposed Alternative Investment Fund Managers Directive (AIFMD) based on investors, financial markets and enterprises across the European Union (EU).
The Directive affects a wide variety of fund types and we the FSA has investigated the impact of the Directive on: hedge funds,; private equity and venture capital funds, real estate funds and investment trusts.
The findings amount to the first formal – and independent – impact assessment of the directive from an EU member state authority, and are expected to add considerable heft to efforts from several European countries, led by the UK, to amend the European Commission’s draft alternative investment fund manager directive in the coming months.
The FSA said that the results of the study bring to the fore its concerns about the one-size-fits-all nature of the directive, which has disproportionate effects on some parts of the investment industry – especially private equity and venture capital – as well as returns to investors across the EU.
The IA shows that it has not been possible to identify the proportion of funds currently domiciled outside the EU that will re-domicile into the EU in order to continue to be marketed to EU investors. If funds do not re-domicile, the AIFMD will greatly reduce the availability of AIF for EU investors. Investors have expressed concern that they will no longer have access to ‘best in class’ funds from across the globe, thereby reducing both the variety and quality of funds. Using evidence as to where investors can employ substitutes, data on current domicile of various fund types, and whether funds are captured by threshold conditions, is contained in the Directive.
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