More than 85% of fund managers unprepared for regulatory change

A survey by PricewaterhouseCoopers has revealed that more than 85 per cent of alternative fund managers are unprepared for the introduction of European regulation.

The survey found fund managers have not begun compliance or implementation programmes to address the implementation of the Alternative Investment Fund Managers Directive (AIFMD).

PwC says it could potentially cause a problem for investors as European fund managers may need to be AIFMD compliant by July 2013 if they wish to market funds.

If managers are not compliant, it may “severely limit” where investors can place capital, according to PwC, with alternatives increasing in popularity in a market where low returns are more becoming more common.

PwC hedge fund leader Rob Mellor says: “It is ironic that European rules which aimed to protect investors are likely to end up limiting the choice of those investors.

“Against a low return environment, institutional investors, including the pension funds for Europe’s workers, will be looking to access global markets and the best managers – implementing AIFMD in time is therefore potentially a significant barrier.”

The financial services company warns some European national regulators could further limit investor choice by creating “additional barriers and regulatory hurdles” beyond AIFMD rules, forcing the cost of investment higher and restricting access.