Alternative Investment Management Association
16 November 2006
London, 16 November 2006: AIMA, the global trade association for hedge funds has responded to today’s European Commission White Paper on Enhancing the Single Market Framework for Investment Funds.
As an overview, the White Paper contains few references to hedge funds and - with its contents focusing mainly on retail funds, sold to the general consumer - has limited relevance to hedge funds.
Nonetheless AIMA has generally welcomed the White Paper - partly as the EC recognises the major importance of the European investment management industry and also because this is a genuine exercise in modernising some of the existing pan-European investment provisions. In particular the Commission sees no compelling reason for investor protection between professional transactions or participants and is keen that national regulators do not interfere in such transactions.
AIMA was disappointed to see the White Paper describe hedge funds as products where “there is a relatively high probability of risk of very adverse investment outcomes”. Quite the opposite is generally true; hedge funds are essentially designed to recognise risk factors and minimise these where possible, illustrated a few years ago when most investment funds slumped in value but where hedge funds continued to perform, protecting their investors’ capital.
Commenting on the White Paper, AIMA’s Executive Director, Florence Lombard said, “The White Paper is very clear that professional investors should be allowed to operate without undue hindrance and that the EC will work to sweep away any such red-tape that impedes professional investment business. We certainly welcome this as a means of retaining and growing such business in Europe and this move may well benefit investors in some nation states that currently suffer from outdated regulatory practices.
We are happy to see standardisation of definitions for private placements but less so on the prospect of any new regulations. This is an on-going exercise and the Commission has promised further research on non-harmonised funds, including hedge funds and the need to develop a single private placement framework.”
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For further information, please contact Eoin Brophy, Hume Brophy Communications on +44 (0)20 7386 0432
1. About AIMA
As the only truly representative global hedge fund association, AIMA, the Alternative Investment Management Association, has over 1100 corporate members worldwide, based in 47 countries.
Members include leading hedge fund managers, fund of hedge funds managers, prime brokers, legal and accounting services and fund administrators. They all benefit from AIMA’s active influence in policy development, its leadership in industry initiatives, including education and sound practice manuals and its excellent reputation with regulators, worldwide.
AIMA is a dynamic organisation that reflects its membership’s interests and provides them with a vibrant global network.
AIMA is committed to developing industry skills and education standards and is a co-founder of the Chartered Alternative Investment Analyst designation (CAIA) – the industry’s first and only specialised educational standard for alternative investment specialists.
For further information, please visit AIMA’s website www.aima.org.