Approved AIFM Registrations in the UK, France, Ireland and Luxembourg

Increasing number of AIFMD-compliant ManCos emerging

22 May 2014

A growing number of professional services firms have set up management company (ManCo) platforms offering fund managers delegated risk management allowing them to become compliant with the EU’s Alternative Investment Fund Management Directive (AIFMD).

“What has been interesting is the number of service providers becoming AIFMs and are viewing the AIFMD as a compliance-based directive and are offering focused compliance-based solutions built around their experience in the ManCo world,” said Mark Fitzpatrick, COO at RiskSystem, an independent risk management service provider in Dublin, Ireland.

One of the most pressing albeit lesser reported concerns for managers is showing to regulators that they have appointed a hierarchically and functionally separate risk officer so as to avoid potential conflicts of interest.  The appointment of a hierarchically separate risk officer should be a relatively straightforward exercise for established managers who can simply hire an individual to a senior position at the management committee level where they theoretically will be able to perform independent risk oversight.

For smaller managers, it is more complicated.  However, some firms including Cordium, DMS, Carne Group, Crestbridge , MDO, MPL Group  and KB Associates, are establishing regulated management companies to provide delegated risk management for AIFs while allowing on-going portfolio management to be undertaken by the investment manager. 

This also enables non-EU firms to avoid having to invest in bricks and mortar if they elect to market to EU investors through national private placement regimes.  There are also independent risk management service providers such as RiskSystem offering risk management services to allow smaller managers and internally managed AIFMs to comply with AIFMD.

“If the decision is made to appoint a third party AIFM, this will enable managers of non-EU funds to market across various member states. It is a cost-effective method and helps firms avoid having to invest in substance, boots or infrastructure on the ground,” added Fitzpatrick. 

Last update: 22 May 2014
 

* UK AIFMs marked '*' are 'Small Authorised UK AIFM' as opposed to 'Full Scope UK AIFM'