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Alternative fund clients wary of European directive

Less than 2 per cent of Alternative Investment Management Association members’ clients believe that the AIFM directive will work in their favour, according to research by thinktank Open Europe.

The survey found that over half of clients view the European Commission proposals unfavourably while 42 per cent are neither for nor against the planned changes.

Under 1 per cent believe that the directive is likely to reduce systemic risk and market volatility while 82 per cent say the changes will not reduce risk and 17 per cent do not know.

The directive on alternative investment fund managers has been criticised in recent months, with a number of trade bodies questioning the potential hazards of the proposals being passed in their current state.

Concerns range from the future of investment trusts to the potential for heavy restrictions on investing in emerging market funds.

Open Europe says the proposals are likely to result in substantial increases in costs unless changes are made. It says in a worst-case scenario, thousands of jobs and millions of pounds in tax revenue could be at stake.

Martin Currie head of product development Toby Hogbin says: “As an industry, we are advocates of strong, effective regulation. The fear is that sometimes it loses its impact if it is delivered too quickly.”

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