British investment trust specialist Frostrow Capital is seeking regulatory permissions to perform the role of Alternative Investment Fund Manager (AIFM), ahead of the impending Alternative Investment Fund Managers Directive (AIFMD) coming into force next year.
Under AIFMD, investment companies must appoint an AIFM that is responsible for investment management and risk management.
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Frostow Capital, which provides strategic advice for investment trust companies, expects there will be a lot of demand from boutique firms to outsource their AIFM services.
This approval will enhance the corporate management and marketing services that the firm provides to its clients.
Managing partner at Frostrow Capital, Alastair Smith, said: "We believe that an attractive option for investment company boards is to appoint a party who is independent from the fund management team as their company’s AIFM.
"Having a separate entity providing this function removes the potential for a conflict of interest should the fund management team be in the direct employment of the AIFM itself.
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By GlobalData"Frostrow further believes that a third party AIFM could be beneficial to investment managers that do not want to take on the extra regulatory burden that being an AIFM gives rise to, overseas managers that are promoting funds in the UK that do not wish to become regulated by the FCA, or for investment company boards who wish to maintain their independence from their fund management team," he added.
