AIFM could boost alternative structured pay-off market

The European Union's Alternative Investment Fund Management Directive, the proposed new set of rules for European hedge funds and private equity industries, could adversely boost the structured products market. John Ferry reports

A number of investment banks now sell hedge fund-style alternative return products, with exposures offered in Ucits III-compliant fund format or as structured notes, neither of which fall under the purview of the European Union's Alternative Investment Fund Management Directive (AIFM). It is thought such hedge fund competitor products could see inflows as investors are forced to seek new sources of alternative returns.

"If what comes out of the Directive is ultimately damaging to the hedge fund