Research carried out by consultant Oliver Wyman and published by the Association of the Luxembourg Fund Industry (Alfi) suggests the introduction of AIFMD has spurred growth in European fund domiciles, with the number of alternative investment funds up by 10% since 2010.
Assets under management of AIFs was up 13% over the period, the research suggests, with Alfi chairman Marc Saluzzi suggesting that the Directive has made European onshore domiciles more attractive.
“Whilst many were against it when it was first introduced because of the fear of high compliance costs and additional complexity, this piece of regulation has brought significant benefits, allowing EU domiciled managers to market authorised funds across the EU,” Saluzzi said.
Four key trends have been uncovered by the research in terms of preferred domiciles:
- Luxembourg added 169 funds, with private equity and real estate funds providing the strongest growth
- Ireland attracted more hedge funds over the period since 2010
- Malta is growing fastest among EU domiciles, in particular attracting niche hedge funds with an average fund size below €20m
The use of Ucits compliant structures for alternative investment strategies is estimated to have more than doubled since 2009 on a global basis, with the number of AIFs up 17% since 2010.
Domiciles that offer one-stop-shop solutions are attracting funds at the expense of domiciles with less well-developed fund infrastructure.
Traditional offshore domiciles remained dominant between 2010-13: Cayman Islands increased its share of hedge funds to 60% in the period, but Ireland is growing the number of registrations of US fund managers.
Delaware in the US is the leading domicile for private equity, accounting for some 69% or €1.2trn in assets invested in the aset class. Delaware also remains the domicile of choice for real estate funds.
In the EU, Luxembourg accounts for some 90% of EU private equity funds, and some 15% of AIF assets in real estate.