INVESTMENT managers are underestimating the risks associated with the European Union’s Alternative Investment Fund Manager’s directive, according to a new report.

In a survey conducted by accountancy firm BDO, which asked investment managers in the UK to identify their top risks, only 3% of them believed efforts to implement the forthcoming AIFM directive would be a key risk for 2010.

‘AIFM is likely to be a major distraction for firms in the run-up to its implementation in 2012,’ said the firm in its report.

‘Analysts are concerned that the regulations are going to be so stringent on alternative investment fund managers – more so than in the US and Asia – that fund managers in those countries will be less willing to provide access to European institutional investors.’

The European Commission’s objective with the AIFM directive is to create a comprehensive and effective regulatory and supervisory framework for AIFMs at a European level, but it has been heavily criticised for the way it has been formulated and consulted on, and the way in which it intends to operate.

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