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Funds
Brexit and the Gibraltar Funds Industry
By Jay J. Gomez, Senior Even before the referendum in June funds. This is commonly referred to as the
2016 there were numerous articles on the likely impact Brexit would have on the financial markets generally. From the Gibraltar funds
industry perspective, Brexit is likely to have little negative impact and if promoted effectively could in fact improve Gibraltar’s rankings in the international arena.
Gibraltar’s primary fund products are the experienced investor fund (EIF) and the private scheme (private fund). Both products are born out of domestic legislation, fall within the alternatives space, pre-date EU legislation on alternative investment funds (Alternative Investment Fund Managers Directive 2011/61/EU)(AIFMD) and most importantly, will remain unchanged post-Brexit. The large majority of the EIFs and private funds established to date remain out of scope of AIFMD: primarily by ensuring that their assets under management do not exceed €100M or €500M in the case of certain closed-ended
Associate, Triay & Triay
de minimus threshold or a small AIFM. With the exception of the pan-European marketing passport and the ability for a fund
manager to manage funds domiciled in any EU jurisdiction, AIFMD has, since its inception, rightly or wrongly, been perceived quite negatively by the global asset management sector for a whole host of reasons. Whilst of course consumer protection is at the core of every regulator’s objective, the industry’s main issue with the AIFMD has been the perception that it was one of the EU’s knee- jerk reactions to the 2008 financial crisis and has substantially increased their cost ratios.
The global industry’s primarily negative perception of AIFMD has resulted in a trend which was quite contrary to what many thought the AIFMD would achieve: in the build-up to the transposition date, many believed AIFMD would result in a mass exodus of funds from traditional offshore jurisdictions into EU jurisdictions in order to seek a higher
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