AIFMD to remain CFOs biggest worry

Even with the dust settling on implementation of the Alternative Investment Fund Managers Directive, private equity CFOs and advisory professionals polled at the EVCA CFO Forum in Brussels this week named regulation as the industry's biggest concern over the next five years.

A survey of attendants at the European Private Equity & Venture Capital Association's (EVCA) annual event for private fund CFOs also revealed that 23 percent think the industry's “biggest strategic issue” is ever-increasing investor expectations. Tax (15 percent) ranked third in the poll, while cybersecurity (8 percent) and fundraising (4 percent) featured in the fourth and fifth spots respectively.

Michael Collins, public affairs director at the EVCA, agreed with the result, naming the AIFMD the “biggest ongoing challenge” despite the regulation taking full force last July.

At the event, PAI Partners CFO Patrick Mouterde said compliance with the directive is not in itself “spectacular or difficult”, but is time consuming and disrupting to his day-to-day processes. As an example of the AIFMD’s burdensome requirements, he mentioned selecting and hiring a depository – including how the depository will fulfill its cash monitoring duties.

Under the directive, a depository must be appointed by a fund manager to act as an investor safeguard responsible for safekeeping funds' financial assets, monitoring cash flows and ensuring a GP complies with its own governing documents. However, there continues to be debate about what depositories are required to do to meet their cash monitoring obligations.