• Industry: Financial Services, Fund Management, Private Equity, Real Estate & Infrastructure
  • Type: Press release
  • Date: 12/19/2012


Geneviève Feyt
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New European Regulations - Alternative fund managers to plan ahead 

Alternative Investment Fund Managers Directive Will Have Significant Impact on Fundraising Activities, Operations and Business Models.

LUXEMBOURG, Dec 19, 2012 – With the compliance deadline for one of the most complex regulatory reform agendas ever introduced into the asset management industry only seven months away, a KPMG survey of more than 70 alternative investment fund managers reveals that nearly half have not taken any concrete steps to analyze the impact the Alternative Investment Fund Managers Directive (AIFMD) will have on their businesses, or to make changes to their operations.


The AIFMD may have long-term implications for investment managers globally, who are looking to raise capital in Europe. They are potentially required to achieve compliance with the directive by July 22, 2013. Despite the impending deadline, just 52 percent of AIFMs surveyed have conducted an impact analysis that takes into account the advice from the European Securities and Markets Authority (ESMA), which was published in November 2011. In addition, only 63 percent of AIFMs have appointed a depositary, a key requirement of the legislation.


There is a misperception that this Directive applies to the alternative sector only.” said Nathalie Dogniez, Lead Partner of the Investment Management Practice of  KPMG  Luxembourg. “In fact, many traditional funds will fall within the scope (non-EU funds sold to EU investors, local products) as they do not take the form of UCITS. Yet many of the Managers of these funds and their service providers have taken no significant action, with the July 2013 deadline fast approaching. The time to prepare is now. Delaying preparations any longer may have significant negative impacts on their operations, fundraising activities and long-term profitability.


According the KPMG survey
The KPMG survey also found that nearly half (45 percent) of AIFMs surveyed say they have not yet considered how the Directive’s remuneration requirements will affect their businesses. And, almost two-thirds (63 percent) have waited to see what was included in the final Implementing Measures from the EU before deciding how to proceed.


The European Commission has today released its proposed “Implementing Measures” for AIFMD which will be final unless the European Council or Parliament objects within a maximum of six months.


The time to act is now
For many AIFMs that continue to delay preparations for the AIFMD, the result could include operational problems, higher costs and the potential loss of clients. The larger the firm, the more pronounced these implications are likely to be, given their higher risk profiles, higher flows and the challenges they may have adapting their operations, technology and even business strategy under AIFMD.


The arguments in favor of getting AIFMD preparations underway as early as possible are compelling,” said Charles Muller, Head of the KPMG European Centre of Excellence for Investment Management. “Those firms that have not already conducted an in-depth impact analysis of the AIFMD for their business would be well-advised to do so without delay, as the business implications are significant, the amount of work to be done is substantial and the timelines for preparation are becoming increasingly short.


The negative impact facing AIFMs that continue to delay their preparations for the Directive includes, but is not limited to, fundraising activities, operations and business models.


Fundraising activities

AIFMs that fail to achieve compliance with the Directive by the July 2013 deadline will be prevented from raising new funds in Europe. If non-EU managers choose to follow those private placement regimes which remain in effect, investment managers need to be aware that these regimes are also changing (as of July 2013) by moving requirements closer to the provisions of AIFMD.   Many non-EU firms are not aware that the private placement regimes are changing along with the implementation of AIFMD.  Firms that choose to wait to conduct their assessments and to embark upon their implementation plans are likely to find themselves racing against the clock and paying higher costs.



The Directive will require AIFMs to introduce a host of operational changes to their businesses. The process of implementing these sweeping changes to areas such as leverage calculation, remuneration, reporting and others promises to be much more costly and complex for those AIFMs that continue to delay their preparation activities. 


Business Models

The AIFMD may also bring about significant changes to AIFMs’ business models, including the area of taxation. “The Directive is not principally concerned with tax at all. However, many of the strategic and operational issues which fund managers need to consider in responding to it will have significant tax implications which need to be taken into account in developing a compliance strategy”, said Georges Bock, Managing Partner of KPMG Luxembourg.  “By introducing an Anglo-Saxon Limited Partnership model and by adapting its tax regime, Luxembourg is placed in the pole position for visionary players”.  KPMG’s survey revealed 28 percent of respondents feel the Directive will have tax implications on some of their fund structures, while 8 percent said it will have a significant tax impact.  


The AIFMD is one of several high-profile regulatory programs AIFMs are being asked to implement over the next few years (e.g. the Dodd-Frank Wall Street Reform and Consumer Protection Act, CRD, MiFID, etc.). Delaying their preparations for the AIFMD may stress their capacity to simultaneously implement the other regulatory changes underway.


About KPMG Luxembourg

© KPMG Luxembourg S.à r.l., a Luxembourg private limited company (, is a subsidiary of KPMG Europe LLP and a member of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.


KPMG International’s member firms have 152,000 people, including more than 8,000 partners, in 156 countries.


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