A survey conducted among approximately 130 Northern Trust (Nasdaq: NTRS) fund manager clients, prospective clients and consultants attending a recent seminar on the European Unions Alternative Investment Fund Manager Directive (AIFMD) found that while 86 percent of attendees broadly understood the implications of the directive, close to 70 percent felt their investors were not engaged in AIFMD considerations.
The AIFMD will ultimately affect every fund manager and their investors in Europe, said Ian Headon, head of product development, Northern Trust Hedge Fund Services. Across the industry, fund managers, fund advisors, custodians and administrators have been monitoring the development of AIFMD and doing research and development work to prepare, however with the majority of attendees at our event citing their AIFMD implementation projects are in the preliminary stages and feeling that their investors are not engaged, there is still more work to be done and more clarity around the directive required.
The primary benefit of the AIFMD for asset managers is the creation of a pan-European passporting regime, making distribution easier. In order to secure the Passport, managers (AIFMs) and funds (AIFs) must comply with new regulations in the areas of depositaries, operations and transparency, and governance.
Despite the distribution opportunities AIFMD will provide, 64 percent of the attendees at Northern Trusts AIFMD seminar saw the directive as primarily a compliance and cost overhead, while close to a third felt it was creating uncertainty and challenges for their business. Less than 10 percent believed it was a strategically important opportunity for their business. Additionally, in the experience of those attending the seminar, only around 10 percent of investors were demanding a fully compliant AIFMD fund product.
We understand the increasing challenges our clients face in implementing not just AIFMD, but other regulations affecting their business and underlying investors, said Toby Glaysher, head of Global Fund Services for Europe, Middle East and Africa at Northern Trust. To help them better navigate these challenges, we have launched a dedicated programme of workshops and provide regular updates from our experts on the latest regulatory developments.
Northern Trusts Global Fund Services business provides custody, fund administration, investment operations outsourcing, and ETF solutions to investment managers across the globe and across the spectrum of asset classes.
About Northern Trust
Northern Trust Corporation (Nasdaq: NTRS) is a leading provider of investment management, asset and fund administration, banking solutions and fiduciary services for corporations, institutions and affluent individuals worldwide. Northern Trust, a financial holding company based in Chicago, has offices in 18 U.S. states and 16 international locations in North America, Europe, the Middle East and the Asia-Pacific region. As of December 31, 2012, Northern Trust had assets under custody of US$4.8 trillion, and assets under investment management of US$758.9 billion. For more than 120 years, Northern Trust has earned distinction as an industry leader in combining exceptional service and expertise with innovative products and technology. For more information, visit www.northerntrust.com or follow us on Twitter @NorthernTrust.
Northern Trust Corporation, Head Office: 50 South La Salle Street, Chicago, Illinois 60603 U.S.A, incorporated with limited liability in the U.S.
The Northern Trust Company, London Branch (reg. no. BR001960), Northern Trust Global Investments Limited (reg. no. 03929218) and Northern Trust Global Services Limited (reg. no. 04795756) are authorised and regulated by the Financial Services Authority.
Northern Trust (Guernsey) Limited, Northern Trust Fiduciary Services (Guernsey) Limited, and Northern Trust International Fund Administration Services (Guernsey) Limited are licensed by the Guernsey Financial Services Commission. Northern Trust International Fund Administrators (Jersey) Limited and Northern Trust Fiduciary Services (Jersey) Limited are regulated by the Jersey Financial Services Commission. Northern Trust International Fund Administration Services (Ireland) Limited, Northern Trust Securities Services (Ireland) Limited and Northern Trust Fiduciary Services (Ireland) Limited are regulated by the Central Bank of Ireland. Northern Trust Global Services Limited has a Netherlands Branch which is authorised and regulated in the Netherlands by De Nederlandsche Bank. Northern Trust Global Services Limited has a Luxembourg Branch which is authorised and regulated by the Commission de Surveillance du Secteur Financier (CSSF). Northern Trust Luxembourg Management Company S.A. is regulated by the Commission de Surveillance du Secteur Financier (CSSF). Northern Trust Global Services Limited operates in Abu Dhabi as a Representative Office, Licence number 13/238/2008 which is authorised and regulated by the Central Bank of the United Arab Emirates. The Northern Trust Company operates in Canada as The Northern Trust Company, Canada Branch which is an authorized foreign bank branch under the Bank Act (Canada). Trustee related services in Canada are provided by the wholly owned subsidiary The Northern Trust Company, Canada, an authorized trust company under the Trust & Loans Companies Act (Canada). Deposits with The Northern Trust Company and its affiliates and subsidiaries are not insured by the Canada Deposit Insurance Corporation. Northern Trust operates in Australia as a foreign authorised deposit-taking institution (foreign ADI) and is regulated by the Australian Prudential Regulation Authority and the Australian Securities & Investments Commission (AFS Licence No: 314970). The Northern Trust Company of Hong Kong Limited is regulated by the Hong Kong Securities and Futures Commission. The Northern Trust Company has a Singapore Branch which is a foreign wholesale bank regulated by the Monetary Authority of Singapore. The Northern Trust Company has a branch in China regulated by the China Banking Regulatory Commission. Northern Trust Global Investments Japan, K.K. is regulated by the Japan Financial Services Agency. Northern Trust Global Services Ltd (UK) Sweden Filial is authorised by the Financial Services Authority and subject to regulation by the Finansinspektionen. Northern Trust Global Investments Limited has a Netherlands branch which is authorised by the Financial Services Authority and subject to regulation in The Netherlands by the Autoriteit Financiële Markten. Northern Trust Global Investments Limited has a Sweden branch which is authorised by the Financial Services Authority and subject to regulation in Sweden by the Finansinspektionen.