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Passport ready?

“Under the new regime, asset managers will no longer need to have a physical presence in the countries in which they are creating their funds.”

 

The full introduction of the AIFMD could change the face of marketing of Alternative Investment Funds (AIF) in Europe. It will do this by increasing choice and security for investors while opening up new opportunities for asset managers.

One of the main objectives behind the directive is to simplify the marketing of AIFs. This will see the introduction of a range of passports. At one end of the mini-spectrum sits the AIF passport to market AIFs domiciled in one country to various EU Member States. At the other are those for the AIFMs (Alternative Investment Fund Managers), enabling asset managers to manage, from one country, EU AIFs in various Member States, either directly or through a branch. Fuller details can be found in the SGSS White Paper on AIFMD which readers will find is referred to several times throughout this issue of Momentum.

Another main advantage of the directive is that it will establish clear, standardised procedures with reduced time scales to obtain those passports or more globally. They will also give investors greater transparency and security, as the passport that will be granted only to asset managers complying with the directive and therefore informs the clients that the asset manager has to meet minimum standards set out within a regulatory framework.

“Under the new regime, asset managers will no longer need to have a physical presence in the countries in which they are creating their funds,” notes Etienne Deniau, Global Head of Business Development, Asset Managers and Owners at SGSS.

They will be able to launch a fund in one country and manage it remotely, only dealing with the Competent Authorities where they have registered their office. This will enable them to simplify or rationalise their product range, using a qualified depository and a good regulatory information service in that country. Such a set up will put smaller asset managers almost on a par with the largest ones.

In brief, both AIF and AIFM passports created by the AIFM Directive represent an excellent opportunity for Asset Managers to simplify their set-up and ensure greater efficiency.

etienne.deniau@sgss.socgen.com

Key Facts

  • AIFMD likely change AIF marketing landscape
  • Passport creation to simplify marketing
  • Physical presence not necessary to launch fund
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