The Alternative Investment Fund Management Directive (the “Directive”) lays down requirements regarding the manner in which Alternative Investment Fund Managers (“AIFM”) should manage Alternative Investment Funds (“AIF”). The Directive defines “Investment Management” to comprise Portfolio Management and/or Risk Management and allows either one of these functions to be delegated to another entity with approval from the local regulator. This means an AIFM could delegate its risk management function to Mirabella, or Mirabella as an AIFM can delegate portfolio management to an existing MiFID manager.
Mirabella can offer a number of solutions that utilise AIFM delegation, which include:
AIFM Hosting Services: In this case Mirabella will act as the AIFM and it will be responsible for the investment management functions. Mirabella will delegate the portfolio management function to an existing regulated investment manager, while retaining the risk management function (so that it remains by definition, an AIFM). This solution is particularly suitable for mid-sized fund managers who wish to comply with the Directive but do not have the resources to perform both investment and risk management in-house, or for those who wish to extend the transitional period beyond July 2014.
Delegated Risk Management Service: In this case, the existing manager becomes an AIFM and delegates the risk management to Mirabella. We can take over the existing firm’s risk process and manage it seamlessly and independently, with minimal disruption to the AIFM. This is useful for investment management firms who wish to achieve the high degree of independence which is now required under the Directive for their risk function. Mirabella’s risk management team has for many years provided its services on an entirely independent basis from the fund manager’s front office and are also able to advise and sit on an investment manager’s risk committee.
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