Embracing AIFMD

The 2010 EU Alternative Investment Fund Management Directive requires all AIFs in the EU to be managed by an approved Alternative Investment Fund Manager (AIFM). Those in the UK must be authorised and regulated by the Financial Conduct Authority. Non compliance is a criminal offence.

The AIFMD sets high standards of business conduct for the AIFM and prescribes the requirement for a depositary, compliance policies and procedures, minimum standards for portfolio and risk management, capital requirements, insurance requirements, remuneration policies, disclosure and systemic reporting requirements of both the manager and the fund.

The introduction of AIFMD has significantly changed the way in which alternative funds are managed, both inside and outside the EU. If either the fund manager or the fund is domiciled in the EU, then AIFMD applies. And, a non-EU manager of a non-EU fund that has an EU investor will also fall under the directive.

AIFMD rules have abolished the potential for a soft touch approach to fund management, forcing investors and advisors to appoint qualified and experienced managers within the fund management entity.

Fund managers should embrace AIFMD, treating it as a quality benchmark. We believe it will not be long before investors expect their manager to be an approved AIFM irrespective of the structuring of a fund.

Marketing in the EU

The AIFMD restricts the marketing of investment funds to European investors. Only authorised EU managers with EU funds will benefit from a “passport” enabling them to market investment funds to professional investors in the EU.

Non-EU managers are expected to be able to access the passport regime from July 2015 by seeking full approval as an AIFM. Until then they have to follow complex individual country private placement regimes.

Testimonials

  • An AR Client

    “I am always positively impressed by the professionalism of Tower Gate’s team. Their support has been crucial in the initial development of Kaleidoscope Capital, and our business cooperation has further strengthened since then.”

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  • An AIF Client

    “Tower Gate is currently providing us with a complete range of fund management services. We took advantage of their bespoke and professional approach in order to set up our first UK-based fund of funds. We would therefore highly recommend Tower Gate as a leading player in the fund management industry for their expertise and flexibility.”

  • An AR Client

    “Where early stage technology venture investors tend to be scatter-gun, we built Beacon Capital to be a Technology VC firm with an exceptional degree of investment focus. So we could concentrate on core business, we needed a regulatory service partner we could rely on. Tower Gate has proven to be a well run, professional platform and their team have been an absolute pleasure to deal with.”

  • An AIF Client

    "Bobby, Will and the team at Tower Gate helped make our transition from closed ended to open ended real estate fund a smooth and straightforward one. They have subsequently not missed a beat in their new AIFM role blending proper and rigorous risk management and process with a commercial awareness and property knowledge which in turn has ensured the smooth operation of our fund."