Risk management is critically important in the AIFMD era. Max
Hilton of Clarus Risk in Guernsey outlines the issues the industry
should be addressing.
One of the key objectives of the AIFMD is investor protection,
but targeting the manager rather than the fund brings a number of
conceptual and practical issues.
Conceptually regulation of investment managers is not as
clear-cut as, for example, regulation of banking where financial
strength is unquestionably the overriding concern. AIFMD sets rules
on the conduct of investment manager business and the controls over
the delegation of key tasks. This is fundamental to the
organisational structure of the alternative funds industry and
understandably has led to concern and criticism that the directive
will reduce the competitiveness of the European funds industry and
add additional costs and burden on top of already challenging
market conditions.
