AIMA releases guide to liquid alternative funds

London - 19 October 2015: The Alternative Investment Management Association (AIMA), the global industry body representing alternative asset managers, has published a new guide about setting up and managing a liquid alternative fund.

The AIMA Guide to Liquid Alternative Funds summarises a range of issues that hedge fund firms and other asset managers face in setting up a UCITS fund in Europe or a mutual fund registered under the Investment Company Act of 1940 in the US, known as a ’40 Act fund.

The guide outlines practical considerations for managers wishing to establish liquid alternative funds, takes account of major regulatory and tax developments, and addresses some of the different requirements and practices affecting funds established in Ireland, Luxembourg and the US, among the most common domiciles for liquid alternative funds.

A range of issues are covered in the guide including investment strategy restrictions, liquidity, operational and governance matters, distribution, tax and financial reporting, the role of service providers and revenue streams and costs.

The guide, which directly compares UCITS and ’40 Act fund structures and requirements, is published at a time of steady growth in liquid alternative funds in Europe and the US. A survey published earlier this year by AIMA, the MFA and KPMG found that roughly one-in-four managers planned to launch at least one alternative UCITS fund over the next five years, while about 15% of managers said they planned to launch at least one ’40 Act fund by 2020.

Jack Inglis, CEO of AIMA, said: “Investment managers that are used to the regulatory environment of private funds should expect to face new operational and regulatory challenges in a liquid alternative fund. But they are also likely to find significant new growth opportunities at a time when many individual investors, pension funds and other institutional investors are looking for ways to increase the liquidity and risk-adjusted performance of their portfolios.”

The guide was produced by a working group of AIMA member firms who sit on the association’s Sound Practices Committee. It is sponsored by J.P. Morgan and KPMG LLP.

Massimo Greco, Head of Europe Funds, J.P. Morgan Asset Management, said: “J.P. Morgan is pleased to co-sponsor the AIMA Guide to Liquid Alternative Funds. The availability of absolute return fund products in mutual fund format offers a larger group of our clients important additional tools with which to manage their investment portfolios.”   

Sean McKee, US Leader of Public Investment Management, KPMG LLP, said: “As investment advisers enter the world of products that entail greater regulatory burdens, this guide will be of great benefit to them. This guide is filled with information that will assist those managers in understanding the various regulatory and tax regimes as well as the resulting governance and operational considerations. It is a must-read for any investment adviser who is new to the world of liquid alternative funds or considering offering such solutions.”

Ends

Note to editors

The full AIMA Guide to Liquid Alternative Funds is available only to AIMA member firms. An executive summary is available here - www.aima.org/en/document-summary/index.cfm/docid/E9F8AA46-BA2F-44BC-A9D3EFC47DA860EA

For media enquiries, please contact:

Dominic Tonner, Director, Global Head of Communications, AIMA

Tel: +44 20 7822 8380

Email: dtonner@aima.org

Laura Brooks, Associate, Communications, AIMA

Tel: +44 (0)20 7822 8380

Email: lbrooks@aima.org

About AIMA

The Alternative Investment Management Association (AIMA) has over 1,600 corporate members (and over 10,000 individual contacts) in over 50 countries. Members include hedge fund managers and other alternative asset managers, fund of funds managers, prime brokers, legal and accounting firms, investors, fund administrators and independent fund directors. AIMA’s manager members collectively manage more than $1.5 trillion in assets. All AIMA members 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 members’ 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. 

About JPMorgan Chase & Co.

JPMorgan Chase & Co. (NYSE: JPM) is a leading global financial services firm with assets of $2.4 trillion and operations worldwide. The Firm is a leader in investment banking, financial services for consumers and small businesses, commercial banking, financial transaction processing, and asset management. A component of the Dow Jones Industrial Average, JPMorgan Chase & Co. serves millions of consumers in the United States and many of the world’s most prominent corporate, institutional and government clients under its J.P. Morgan and Chase brands. Information about JPMorgan Chase & Co. is available at www.jpmorganchase.com.

About KPMG LLP

KPMG LLP is the U.S. member firm of KPMG International.  Together with the other member firms of KPMG international (collectively ‘KPMG’), it is part of a global network of professional firms providing audit, tax and advisory services in 155 countries and employing more than 162,000 people. KPMG LLP traces its origins to 1897 and became a limited liability partnership in 1994. As a leading professional services firm, KPMG LLP has 90 offices with more than 27,000 partners and professionals providing services throughout all 50 states.