With respect to leverage calculation, there is a degree of confusion among respondents about the leverage calculations methods they intend to use under the AIFMD. ESMA’s technical advice to the European Commission on the upcoming implementing measures included three different methods for calculating leverage (gross, commitment and advanced). Each of these methods has its own limitations in terms of providing an accurate leverage depiction. Furthermore, some respondents to the survey believe that leverage is not defined in the appropriate manner for each of the alternative asset classes within the scope of the AIFMD. As a result, a significant majority (71 percent) of the survey respondents indicate they do not currently know which leverage calculation method they will use under the AIFMD. Twelve percent say they plan on using the advanced method, 11 percent say they will use the commitment method and 7 percent say they will adopt the gross method.
On the topic of remuneration, according to KPMG’s survey data, nearly half (45 percent) of respondents said they have not yet considered how the remuneration requirements of the AIFMD will affect their businesses. An additional 33 percent of respondents said they have explored the impact of the changes and that while they intend to be in scope at some point in the future, they are currently exempt.
Only 22 percent of respondents say they are currently compliant with the EU remuneration policies for bankers. Investment managers throughout Europe are not required to comply, as at the present time, since these rules apply to banks and some investment managers. The Directive, however, will make these remuneration policies applicable to alternative asset managers.
Since changing their remuneration policies part way through the month of July will undoubtedly prove undesirable for most AIFMs, we are advising firms to adapt their policies as of the beginning of their remuneration years to streamline the process.
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