CEO Blog: January Notes

By Jack Inglis, CEO, AIMA

Published: 15 January 2018

© Shutterstock

I’m writing this on so-called Blue Monday, supposedly the bleakest day of the year now the Holidays are over, so let’s start on an upbeat note:  while I might not go so far as to call it, as HFR has, a “perfect year” (does such a thing exist?), 2017 was altogether much better than the previous one for hedge funds. Investor capital flowed back into the industry and performance on the whole was good: on average around +10% depending on which index you look at although there are reports of many funds delivering over twice that. The point HFR was making was that every month last year was one of positive returns and that has to be a good thing for confidence in the industry.

MiFID2 came and no one died. In fact judging by the more relaxed faces of the MiFID manager working group meeting in our offices last week, most of our members took the January 3rd deadline in their stride. Yes, there have been glitches in reporting, but these have been caused more by the vendor side rather than managers being unable to fulfil their part. There is further work to be done in finalising payment agreements with brokers for research and other services but by and large these things should all get ironed out over the next few months.

PRIIPS also came into force in Europe at the beginning of the month with further disclosure requirements for retail investors. The definition of “retail investor” is broad so do check our new guide out this month: EU disclosure obligations under PRIIPS and MiFID2. Special thanks go to the law firm Macfarlanes LLP for collaborating with us on this guide.

So on to the next piece of EU regulation (yes they’ve been busy in Brussels): GDPR (General Data Protection Regime) which comes into effect on 25th May. We are running implementation events in London and New York this month as well as publishing a guide on what to do. It is nowhere near as complex as MiFID2 but there is still work that needs to be done and judging by the 250 already signed up to the London session there is real appetite to get it right.

I’ll be in Cayman in early February taking part in both the CAIS and Maples conferences. Many of our members make the winter trip to warmer climes for these events so I look forward to seeing those that are there. As part of this we are conducting, alongside CAIS, a responsible investing survey. ESG is fast becoming a topic of discussion for hedge fund managers and this survey comes on the heels of the first hedge fund DDQ for ESG that we worked on with UNPRI and a new proposal by the EC to integrate compliance with ESG factors as part of managers’ general business mandate akin to a fiduciary duty requirement. If you have 5 minutes to spare please do complete the short survey (here). Its findings will be released at the time of the Cayman conference.

That’s it. No mention of Bitcoin. Perhaps I’ll make room for it next month.