More Time than Sense: Hedge Funds and the Making of the AIFM Directive

July 26, 2010

After months of intense political wrangling, furious lobbying and cogitation of an unprecedented number of amendments … industry was led to believe that we were close to a settled form of text for the proposed new EU Alternative Investment Fund Managers (AIFM) Directive.  Alas, no.  The European Parliament and the European Council have alternative versions of the Directive which are … not surprisingly … inconsistent on a number of key issues.  The hope was that a compromise text would be settled by the end of June but negotiations continue and it is now unlikely that we will see an agreed text until September.  In the meantime, uncertainty in the sector is rife — a sentiment not aided by the acceleration of the implementation of proposed amendments to the EU Capital Requirements Directive — a directive which overlaps in part with the AIFM and potentially extends to certain EU hedge funds.  The costs of this never ending regulatory fog on industry continue to mount.

Gibson Dunn partner Selina Sagayam is the author of "More Time Than Sense: Hedge Funds and the Making of the AIFM Directive," which first appeared in EuroWatch, summarizing the recent leg of the journey of the AIFM Directive in the EU quagmire.

Reprinted with permission from EuroWatch (July 15, 2010), © 2010 Thomson Reuters/WorldTrade Executive.