Marketing funds in Europe
Given the wealth of investment opportunity still available stateside, why look to Europe? This was the topic of discussion at the March 2, 2016 presentation “Marketing Funds in Europe: Understanding the Opportunities and Challenges for Alternative Investment Funds and UCITS,” held at the Harvard Club of New York. Representatives from BNP Paribas, DMS Offshore Investment Services, Dechert LLP and Juniper Place LLP considered the various strategies for raising capital in Europe, including best ways to target EU investors, routes to market such as UCITS and AIFs, as well as the benefits of enlisting third-party support.
As a source of investment capital, Europe remains a powerful beacon of light. Closing out 2015, EU‑based AUM stood at $14.2tn, more than twice 2008’s total, with a growth rate north of 11 percent. As companies continue to trim excess fat, EU capital-market returns are likely to outpace those in the US over the near term, while the weaker euro against the dollar will serve to underpin export strength. Investors are also expected to benefit from more generous dividends as well as lower valuations going forward.
Interested parties have a number of different routes to market, from fully registered approaches (either UCITS or AIF) to national private placement regimes (NPPR). The Undertakings for Collective Investment in Transferable Securities (UCITS) directive, for instance, provides managers with a “passport” to market open-ended funds to retail customers throughout the EU. Though mainly limited to traditional approaches, funds that employ strategies such as long-short or qualifying collective investment schemes that meet UCITS guidelines regarding diversification, leverage and risk management may still be eligible.
For non-traditional firms there’s the Alternative Investment Fund option (AIF), which, under the purview of the Alternative Investment Fund Managers Directive (AIFMD) requires that alternative managers in Europe maintain robust operational transparency on behalf of investors and regulators. This includes frequent and detailed reporting on investment practices, executive-compensation disclosures, and other critical data. As the application of AIFMD can differ from one region to the next, firms that operate in multiple jurisdictions will need to be aware of specific rules within each of the participating member countries. Accordingly, alternative-investment fund managers (AIFMs) may find it advantageous to seek third-party marketing and compliance assistance as part of their EU exploration.
Download the full report "Marketing funds in Europe" for opinions from
Peter Astleford, co-chair of Dechert’s global financial services group
Paul Harvey, Founder and CEO of Juniper Place LLP
John D’Agostino is a Managing Director at DMS Offshore Investment Services (DMS)
Ian Lynch, Global Head of Hedge Fund Services at BNP Paribas Securities Services