Thomas Bullman is the founder of the Hedge Fund Society and Hedge Fund College with over 1,200 members in 40 countries. Thomas has previously worked with Legal & General Investment Management, Barep Asset Management and Pioneer Alternative Investments in various regulatory positions. Thomas holds a degree in Business and Legal Studies, a masters degree in Commercial Law, and is currently completing a PhD in hedge fund regulation.

Despite the absence of a formal naming ceremony, it is clear that 2010 is the ‘Global Year of Regulation’. Political motivation and public pressure to ‘clean up’ financial markets is at fever pitch and hedge funds have found themselves on the front line in a battle not of their choosing with regulators. Intense public scrutiny means that with regulators watching hedge fund managers, and hedge fund managers watching service providers, it is necessary for there to be a clear demonstration from all industry participants of both awareness and understanding of the new regulatory measures.

This article discusses briefly some of the regulatory issues in both the EU and US, before outlining a new hedge fund industry initiative that has been launched to create this awareness and enable a demonstration of understanding to be standardised.

Draft Alternative Investment Fund Managers Directive

The Alternative Investment Fund Managers Directive (“AIFM Directive”) has been mired in controversy since the European Commission first issued its draft of the Level 1 AIFM Directive text in April 2009.  This was widely criticised from the outset for having been drafted in haste and without giving proper consideration to the differences between the types of alternative investment funds it proposed to regulate.  Because the proposed AIFM Directive will cover not only private equity and hedge funds, but also various other non-UCITS funds as well, the ‘one size fits all’ approach was not considered, especially by those lobbying from the UK, to acknowledge the very real differences between these quite separate types of investment funds.  

The article continues to International Alternative Investment Review – n.2, 2010 www.iaireview.org/subscribe