EU hedge fund rules in focus as Business Bermuda visits Geneva

By added on 01/07/2011

The introduction of Alternative Fund Managers Directive (AIFMD) was top of the agenda for Business Bermuda at the Geneva Hedge Fund Re-domiciliation conference for Managers & Funds in Switzerland this week, The Royal Gazette reports.

The one-day event, which was held at the Starling Geneva Hotel, focused on a number of issues impacting the fund industry and Business Bermuda discussed the implementation of AIFMD by non-European Union (EU) offshore jurisdictions as well as its own current legal frameworks, tax structures and possible regulatory changes.

At the conference, Business Bermuda welcomed the directive as a positive development for the fund industry and reiterated that its regulatory regime will meet the standards set by the EU under AIFMD. The delegates also discussed the taskforce set up by Government to promote asset management on the Island and to ensure that it can be flexible to meet all the needs of fund managers.

Cheryl Packwood, CEO of Business Bermuda, who spoke at the event, said: “The Hedge Fund Re-domiciliation conference is an important event and an excellent opportunity to discuss the benefits of Bermuda’s legal and regulatory framework as well as the cost advantages of basing in Bermuda for asset and fund managers such as lower costs, practical efficiencies associated with the use of private placement regimes and access to the many other benefits such as Bermuda’s tax neutrality or no remuneration caps, which can be attractive to investors.”

Peter Hughes, managing director of Apex Fund Services, which provides global fund administration solutions to investment managers investing in traditional and alternative assets, said: “Bermuda is internationally recognised as the ‘gold standard’ in offshore jurisdictions and known for being one of the best-regulated and most compliant jurisdictions worldwide. An example of growth in Bermuda over last few years is the establishment of some quality administrators including ISIS Funds, Apex and Equinoxe who have responded to the Bermuda hedge fund market’s need for tailor-made administration service.

“Bermuda is also home to large insurance-linked securities hedge funds focusing on event driven investments and provide investors with a proven uncorrelated asset class. Five percent of global hedge funds are currently domiciled in Bermuda, they will be among the first to benefit from Bermuda’s future equivalence with the AIFM Directive.”

Matthew Feargrieve, Partner at Appleby, said: “Many alternative investment funds are managed from Europe but are domiciled in offshore locations so now one of the key considerations will be to establish whether the necessary cooperation agreements are in place. Bermuda has signed 25 tax information exchange agreements and is making efforts to qualify as a ‘third country’ for the purposes of the EU AIFMD when implementing measures are finalised.”