UK Roundtable: AIFM not to be feared but industry needs voice

Participants at last month’s UK Roundtable say the incoming directive on Alternative Investment Fund Managers will lead to a more professional sector and is not something that should be feared, however a lobby effort on some of the more draconian elements would be welcome.

Participants of PERE’s UK Roundtable have welcomed the controversial forthcoming European Union directive on Alternative Investment Fund Managers (AIFM), declaring that increased transparency of the asset class should be embraced rather than feared.

However, the three participants at the event held last month  also called for a specific voice on behalf of private equity real estate to influence the rules as time runs out before the directive is implemented.

Alex Jeffrey, MGPA’s chief executive for Europe, Paul White, managing director of Frogmore and Dean Hodcroft, head of real estate for Europe, the Middle East, India and Africa at Ernst & Young considered enhanced regulation as a means to improve “professionalism” in the private equity real estate sector.

Jeffrey said: “I don’t see it as a threat. I think we should see it as a good thing if it helps investors become more confident in the professionalism of our industry.” Hodcroft added: “Regulation will make real estate more institutionally investable. We need something to kick-start the true professionalisation of fund management.” However White also pointed out that private equity real estate fund managers needed a collective voice to ensure they could influence regulation coming out of Europe.

The AIFM, which is still in draft format, has met with widespread objection to some of its rules such as the exclusion of certain non-European firms being allowed to market their products to European investors. European organisations representing hedge funds and mainstream private equity have lobbied strongly over such issues.

White said:  “I’m not worried about any regulation – we work with what we have. But what we need to try to do is influence the direction in which the regulation goes by having a seat at the table. At the moment there is no stage where we can have a proper dialogue.”

The PERE UK roundtable debate took place in the top floor restaurant of the Hilton hotel, Park Lane, London on Thursday 6 May. The three participants discussed a wide range of topics, from investment opportunities and lending habits to the fallout of the recent general election.

Click here to read the whole debate in the June issue of PERE, out now.