Sensible regulation and a familiar legal system are the two most important factors for investors when considering where potential investment funds are domiciled, according to a study of institutional investors.
‘Sensible regulation’ was cited by 92 per cent of respondents, followed by ‘familiar legal system’ (85 per cent) and ‘expertise’ (84 per cent).
‘Speed to market’ was cited by more than a quarter (27 per cent) of respondents.
The research, commissioned by Hassans International law firm and Deloitte Gibraltar, found that half (50 per cent) of European institutional investors believe it is important for non-European fund managers to be able to market funds across the whole of Europe. One in five (20 per cent) respondents said it is very important with just 15 per cent believing it is not important.
The advent of the Alternative Investment Fund Managers Directive (AIFMD) last July is set to bolster EU fund jurisdictions such as Gibraltar which are able to offer foreign fund managers access to the whole of Europe.
According to the study, which also canvassed view on asset allocation and sentiment towards alternative investment funds, more than twice as many European institutional investors believe investor allocations to hedge funds and other alternative investments will increase over the next three years as opposed to decrease (46 per cent and 21 per cent respectively).
James Lasry, head of funds at Hassans International Law Firm, Gibraltar, says: “In this new environment, with significant opportunities available to professional, focused jurisdictions, Gibraltar has positioned itself to maximise business opportunities under the AIFMD.
“As an onshore jurisdiction within the EU, Gibraltar offers effective and efficient fund solutions to fund managers and experienced investors that want full access to the EU market. Experienced Investor Funds are already the most user-friendly fund vehicles within the EU, with the quickest time to market.”
Jon Tricker, partner at Deloitte (Gibraltar), says: “For funds that are establishing themselves now, or funds that wish to continue to market in the EU – particularly those wishing to market in Germany, France, Italy and the Netherlands, where the private placement regimes have been substantially restricted – they will have to consider a European onshore option and, depending on size, AIFM-compliant structures.”
The AIFMD came into force last July and covers the management, administration and marketing of alternative investment funds (AIFs). The AIFMD established an EU-wide framework for monitoring and supervising risks posed by alternative investment fund managers and the AIFs they manage. AIFs include hedge funds, private equity funds, and real estate funds, among others.