March 2021 - The AIFM data challenge - Successfully tackling regulatory and operational challenges in 2021
More than two years into Circular 18/698, and just having gone live on the recent SFDR journey, PwC’s Alternatives Advisory team hosted an event aimed at understanding how Alternative Investment Fund Managers (AIFMs) coped with these two additional requirements, in the context of strong growth both in terms of new funds as well as overall assets under management (AuM). Main topics of discussion turned around how equipped AIFMs are for further regulation, the potential CSSF on-site visits, and whether the recent developments impacted their operational setup and approach to data management.
This year, the event was split into two sessions. PwC held one session with third-party AIFMs on 16 March and another one with Group AIFMs on 23 March with an overall participation of just above 25 managers.
The following topics were discussed at the roundtable event:
- CSSF on-site visits on Circular 18/698 compliance
- Improving operational efficiencies through efficient data management
- SFDR implementation: lessons learnt and preparedness
- Outlook of third-party AIFM landscape*
* For the third-party event only
While regulatory waters are currently slightly calmer after the implementation of circular 18/698 and the publication of SFDR Level I, AIFMs are currently putting a major focus on operational efficiency in order to cope with and prepare for strong business growth. A crucial driver in that exercise is data and the way it is being collected, treated and reported. Having their middle- back- and front-office operations in order will allow market participants not only to make better business decisions and remain relevant in the market, but it will also facilitate the regulatory aspects of their organisation. Examples of this include providing documents and answer questions during on-site visits from the CSSF or preparing for the practical application and data collection exercise under SFDR Level II as from next year. The one key take-away from both sessions is that, no matter which category of business model you fall into (Group or third-party AIFM) and regardless of regulatory burdens, digitalisation and data management are key to continue succeeding in the future, scaling operations and staying competitive.
"Tools are like Lego - very easy to combine."
