August 29, 2014

Late surge in AIFMD approvals as transitional period ends

Source: Dublin Finance magazine

Latest figures from the Central Bank of Ireland show a late surge in authorisations under the AIFMD in the past month. All qualifying managers who sought to be authorised prior to the 22nd July deadline were authorised, in total 64 AIFMs have been authorised. The Alternative Investment Fund Managers Directive (AIFMD) regulates EU and non-EU fund managers that market alternative investment funds to investors domiciled, or with a registered office in the EU.

A statement from the Central Bank said ‘As of close of business, 22 July 2014, the Central Bank has authorised 64 AIFMs. In addition, 35 AIFMs have been registered. In total, 99 AIFMS have the authority to operate within the state and the 64 authorised AIFMs also have the right to market themselves throughout the EU.

This follows a period of intense interaction between the Central Bank and AIFM applicants where the merits of each application were closely scrutinised.

As well as recognising the successful delivery by its own Authorisation Team, the Central Bank would like to thank industry practitioners for their co-operation and responsiveness against a background of a brand new regulatory regime for Alternative Investment Fund Managers.

A further 24 applications are largely complete but authorisation was not finalised because of the firms’ own business needs. These may, in due course, be granted pursuant to Art 8(5) of 2011/61/EU.’

Figures from the Central Bank of Ireland released on 15th June showed that 25 AIFMs had been authorised with a further 18 AIFMs registered.

In addition, 48 AIFMs have registered with the Central Bank of Ireland to operate and provide services in Ireland on a branch or cross-border basis. Of the 48, 14 are non-EU AIFMs – 10 US AIFMs, 3 Guernsey AIFMs and 1 Jersey AIFM.

Capita Financial Managers (Ireland) Limited has become one of the latest AIFMs to be authorised by the Central Bank of Ireland. Capita will provide independent AIFM services to US fund managers looking to access European investors but who do not have an in-house AIFMD compliant solution.

Capita Financial Managers (Ireland) Limited today announced it has been granted an alternative investment fund manager (AIFM) licence by the Central Bank of Ireland.

The licence authorises Capita to take regulatory responsibility for the funds to which it acts as AIFM. Capita will provide independent AIFM services US fund managers, so they are compliant with the Alternative Investment Fund Managers Directive (AIFMD).

AIFMD is an EU directive that came into force on 22 July 2013. It regulates EU and non-EU fund managers that market alternative investment funds to investors domiciled, or with a registered office in the EU.

Capita has invested significantly in both personnel and IT to meet the requirements of the directive, including the appointment of a new head of investment risk and the implementation of integrated performance and risk reporting.

Paul Nunan, managing director of Capita’s fund solution business in Ireland, said: “AIFMD requires fund managers to comply with a new and extensive set of regulations that affect transparency, the conduct of business, remuneration, leverage and reporting. When it was introduced, many U.S. managers believed its cost, complexity and requirements would prove to be a bridge too far, but necessity is the mother of invention. Capita provides a ready-made solution for non-EU managers who desire access to European investors without the hurdles associated with developing an in-house solution.

“This allows fund managers to focus on managing their funds, while ensuring that aspects like governance and reporting are handled by specialists. As managers do not need to apply for a separate licence their products will get to market faster and benefit from the economies of scale. They will also be able to choose to use their own service providers (subject to appropriate due diligence) or use Capita’s fund solutions business and existing relationships.”

“With common culture, language, relative proximity, existing relationships and embedded local expertise, Ireland is an extremely compelling entry point for U.S. hedge funds to access the EU market.”