European Investors Prepare For Post-AIFMD World

Aug 5 2014 | 11:51am ET

As transitional periods end, European allocators are preparing for life post-AIFMD, according to a new survey from Deutsche Bank.

DB surveyed over 90 hedge fund managers representing almost $500 billion in assets under management and found that almost half planned to actively market in at least one European Economic Area country after the July 22nd deadline for compliance with the new EU rules.

By region, 63% of participating European managers and 39% of participating U.S. managers plan to market in at least one EEA country. According the survey, the most popular jurisdictions in which to market are the UK, Sweden and the Netherlands.

The results are found in the latest DB Global Prime Finance Monthly Hedge Fund Trends, as part of a survey of investor sentiment.

Analysts also report that London-based hedge fund managers continue to focus on opportunities in the European event space—and are using a very broad definition of 'event,' with investment ideas ranging from “hard catalyst events to special situations to distressed securities.”

Analysts also report requests for UCITS managers in the event space, particularly from funds of funds that have had significant UCITS inflows this year. Generally, the report notes, demand for UCITS has been rising over the past six months.

In China, the establishment of the Asset Management Association of China, a self-regulatory organization sponsored by the China Securities Regulatory Commission, and the revised Securities Investment Funds Law represent moves “in the right direction” for that country's hedge fund industry, said DB analysts.

“Whereas previously securities were defined as stocks, bonds and shares in regulated mutual funds, the new updates are a milestone for vehicles that invest in publicly offered securities to institutionalize and legitimately raise capital,” said the report.

And in South Korea, institutional investors are increasingly turning to hedge funds for capital preservation and portfolio diversification, said the report.

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