25/08/2009 Author: Tony Griffiths

Mercer warns of Directive threat to pension returns

More concerns about the AIFM Directive’s potential impact on hedge fund investors were raised today with global consultancy firm Mercer warning that the current proposals could harm investment returns for institutional investors.
 
The firm said that if the Directive was not “substantially revised” it could result in an “exodus of managers from the EU” and a “dilution of the overall quality of providers”.
 
Robert Howie, Mercer alternatives researcher, revealed that the firm’s pension fund clients were worried that the proposals would limit their options for achieving returns and diversifying their investment portfolios.
 
Said Howie: “Hopefully the European Commission will listen to their concerns when redrafting the Directive as some of the current proposals may be counter-productive to improving the industry over the long term.”
 
Today’s announcement contributes to the surge in investor-led protests against the Directive, such as those documented in the last edition of HFMWeek from the Association of British Insurers (ABI), Hermes Pensions Management and French insurer AXA.
 
Earlier this month, research by the Alternative Investment Management Association (Aima), the hedge fund trade body, suggested that the AIFM Directive could cost the EU’s pension industry €25bn ($35.8bn).