Delegation of Investment Management Under the AIFMD (2023)

The delegation model of fund management, whereby self-managed investment vehicles or their management companies appoint third party investment managers and advisers, has been a key basis upon which the success of the funds industry in Ireland has been built. There are currently in excess of 5,000 Irish domiciled funds and sub-funds, with assets in excess of 1 trillion euro, which have been established by over 400 fund promoters based in over 50 countries. An incredible 98% of these promoters are based outside Ireland and in most cases investment management services will be provided from the promoter窶冱 home jurisdiction, clearly showing the attraction of Irish domiciled vehicles and the delegation model for international fund managers.

The finalised text of the level 2 measures (Level 2) to the Alternative Investment Fund Managers Directive, (Directive 2011/61/EU) (AIFMD), approved and published by the European Commission (Commission) on 19 December, 2012, details the specific conditions to be applicable where investment management functions are to be delegated or sub-delegated under this legislation. This article explores the specific requirements contained in this finalised text relating to delegation and highlights the legal documentation which will be required to ensure compliance.

Background to the AIFMD and the Level 2 Regulation

The European Commission (Commission) first published a proposal for a directive regulating alternative investment fund managers (AIFMs) at a European level in April 2009 in the wake of the global financial crisis. Fundamental aims of this proposed directive were stated to be to assist in securing investor protection and to limit the potential for alternative products to pose a systematic risk to financial systems. Following numerous counter-proposals and amendments, a draft directive was ultimately agreed in October 2010. This directive, which regulates alternative managers, proposed a potential new European 窶湾assport窶兪for compliant alternative funds similar to the highly successful one currently afforded to UCITS. Accordingly it is expected to lead to a significant boost for the alternative funds industry within Europe once this becomes operational from mid-2013.

The AIFMD does note in its preamble1that depending on their legal form, it should be possible for alternative investment funds falling under the directive (AIFs) to be either externally or internally managed and that AIFs that do not appoint an external AIFM will themselves constitute the AIFM. AIFs structured as self-managed investment companies, for example, will typically fall into this category. The AIFMD does specifically address the right of AIFMs to delegate their functions, subject to applicable conditions2. However, the AIFMD was prepared as a principle-based framework document under the 窶廊amfalussy Process窶兪and accordingly, following its implementation, much of the fine detail remained to be determined as 窶廊evel 2窶兪measures.

As a result, the European Securities and Markets Authority (ESMA), which replaced the Committee of European Securities Regulators (CESR), prepared advice in 2011 to assist in finalising the relevant details for the ultimate implementation of relevant aspects of this directive. The Commission then produced draft finalised text in light of this for Level 2 in 2012.

The initial draft wording for the Level 2 measures circulated by the Commission in 2012, disregarded the advice of ESMA in key respects, including in relation to delegation, and raised concerns that this legislation might jeopardise Ireland窶冱 position as the leading European domicile for AIFs due to the constraints imposed in this regard. However, the finalised text contained in a regulation approved by the Commission on 19 December 2012 (Regulation) clarifies that delegation will continue to be acceptable under this legislation in practice and sets out the relevant applicable requirements in greater detail.

Overview of Delegation under the AIFMD

Delegation of investment management was provided for in the AIFMD itself3 and this general concept is addressed and expanded upon in Section 8 of the Regulation4. This section addresses the topic under a number of headings, including general principles, reasons for the delegation, the nature of the delegate, potential conflicts of interest and the effective supervision of the delegate.

(Video) AIFMD - Delegation: current regime and future challenges

The relevant 窶賂eneral principles窶兪include ensuring that the delegation structure does not allow for the circumvention of the AIFM窶冱 responsibilities, obligations or liability (including in relation to its authorisation). Delegation arrangements must be documented in written agreements between the AIFM and the delegate and there are significant requirements relating to the specific contents of such agreements5 including obligations to set out in the agreement:

  1. the respective rights and obligations of the parties, including rights of information, inspection, admittance and access for the AIFM and its instruction and monitoring rights with regard to the delegate in order to ensure effective supervision;
  2. terms requiring the delegate to properly supervise the performance of the delegated functions and adequately manage associated risks internally;
  3. instruction and termination rights, including a requirement that sub-delegation can take place only with the consent of the AIFM;
  4. a requirement on the delegate to disclose to the AIFM any development that may have a material impact on the delegate's ability to carry out the delegated functions effectively and in compliance with applicable laws and regulatory requirements;
  5. an obligation to protect any confidential information relating to the AIFM, the relevant AIF itself and the investors in that AIF; and
  6. a requirement to ensure that the delegate establishes, implements and maintains an appropriate contingency plan for disaster recovery and periodic testing of backup facilities.

Existing contractual arrangements relating to delegation, i.e. investment management agreements, will need to be reviewed and may need to be revised to ensure all of these requirements are addressed where the relevant fund structure falls under the terms of the AIFMD. In addition to specific requirements, such as those above, required to be included in the actual delegation contract itself, a series of on-going obligations are also imposed on the AIFM by the applicable general principles. It is likely that these will be addressed and documented separately in a procedures manual or business plan of the AIFM. Examples of these obligations include6:

  1. establishing methods and procedures for reviewing on an on-going basis the services provided by delegates to ensure that they carry out the delegated functions effectively and in compliance with applicable law and regulatory requirements to an appropriate quality standard;
  2. setting out the appropriate action to be taken if it appears that the delegate cannot carry out the functions effectively or in compliance with applicable laws and regulatory requirements;
  3. ensuring that the AIFM has the necessary expertise and resources to supervise the delegated functions and in fact effectively supervises the delegated functions and manages the risks associated with the delegation; and
  4. instructing the delegate regarding implementation of the investment policy of the AIF and monitoring compliance on an on-going basis.

Many investment managers will already have some form of internal procedures and policy manuals which can be adapted to specifically address these requirements. Otherwise, and for self-managed corporate structures in particular, the form of 窶話usiness plan窶兪currently required for UCITS may constitute a useful basis upon which to base such a document.

Delegation of portfolio or risk management

At present, the decision to delegate investment functions is entirely one at the discretion of management. However, there will be a new requirement under the AIFMD to justify this decision upon 窶椀bjective reasons窶處a class="headers2" href="#_ftn7" name="_ftnref7" title="">7. Examples of reasons which would be acceptable for this purpose are included in the Regulation8 and these include: (a) cost savings; (b) expertise of the delegate in specific markets or investments; or (c) access of the delegate to global trading capabilities. It will be necessary for the AIFM to provide the competent authorities with a detailed description of the delegate and explanation of the objective reasons for any delegation with supporting evidence.

Delegates are required to have sufficient resources and to employ sufficient personnel with the skills, knowledge and expertise necessary (including appropriate training and previous experience) for the proper discharge of the tasks delegated. Personnel of the delegate are also required to be of sufficiently good repute and examples of the research to be undertaken to confirm such matters are detailed, for example specific attention is required to be paid to any previous convictions for dishonesty or fraud9. The requirements in this regard are broadly similar to those currently applicable under the 窶惑itness and probity窶兪regime of the Central Bank of Ireland (Central Bank) and therefore this can essentially be regarded as applying concepts similar to those that apply to, for example, directors of Irish regulated funds, to delegates.

Where delegation of portfolio management or risk management is proposed the Regulation sets out the types of EU regulated entities to be deemed to be appropriately authorised for such purposes10. It also notes that non-EU entities authorised under the AIFMD or those authorised or registered for the purpose of asset management and effectively supervised by a competent authority in their home country would also qualify, subject to certain conditions11. Specifically, there must be a written agreement between the competent authorities of the home Member State of the AIFM (Competent Authority) and the supervisory authorities of the delegate which allows the Competent Authority to:

  1. obtain on request information and documents necessary to carry out their supervisory tasks as provided for under the AIFMD;
  2. receive information from the supervisory authority in the third country for the purpose of investigating apparent breaches of the AIFMD and Regulation as soon as possible;
  3. obtain cooperation with regard to enforcement matters in accordance with applicable local law in cases of any such breaches; and
  4. carry out on-site inspections on the premises of the delegate.

The notion of entering into agreements which will have the effect, in accordance with the final point above, of permitting European supervisory authorities to carry out inspections on their premises outside Europe may pose concerns for some asset managers. However, the explanatory memorandum to the Regulation clearly specifies that the right to carry out on-sight inspections should include the ability to request the local third-country supervisory authority to carry out on-site inspections and also, where permission is obtained from the third-country supervisory authority, the ability of the Competent Authority to carry out the inspection themselves, or to accompany staff of the local supervisory authority to assist with an on-site inspection.

One of the stated aims of the AIFMD is to ensure more effective oversight of the alternative sector and the directive makes it clear that delegation should not be permitted where it prevents effective supervision. The Regulation clarifies that a delegation shall be deemed to prevent the effective supervision of the AIFM where12:

  1. any of the AIFM, its auditors or the Competent Authority do not have effective access to data related to the delegated functions and to the business premises of the delegate, or the Competent Authority is not able to exercise those rights of access; or
  2. the delegate does not cooperate with the Competent Authority in connection with the delegated functions.

Conflicts of interest

(Video) AIFMD Video Briefing: Delegation Provisions

The AIFMD precludes delegation in circumstances where it conflicts with the interests of the AIFM or investors in the relevant AIF13. The Regulation clarifies that determining this shall include consideration (at least) of14:

a. the extent to which the delegate controls the AIFM or has the ability to influence its actions, where there is any other contractual relationship between them;

b. the extent to which the delegate itself is controlled by an investor in the relevant AIF where there is any other contractual relationship between them;

c. the likelihood that the delegate makes a financial gain, or avoids a financial loss, at the expense of the AIF or the investors in the AIF;

d. the likelihood that the delegate has an interest in the outcome of a service or an activity provided to the AIFM or the AIF;

e. the likelihood that the delegate has a financial or other incentive to favour the interest of another client over the interests of the AIF or the investors in the AIF;

f. the likelihood that the delegate receives or will receive from a person other than the AIFM an inducement in relation to the collective portfolio management activities provided to the AIFM and the AIFs it manages in the form of monies, goods or services other than the standard commission or fee for that service.

The appointment of a strong independent board to the AIFM would ensure that the 窶歪ontrol窶兪test in (a) above would be satisfied. It can be noted that the Corporate Governance Code for Collective Investment Schemes and Management Companies adopted by the Irish Funds Industry Association in consultation with the Central Bank, and which is now applicable to Irish funds, does require the appointment of at least one entirely independent board member.

In relation to concerns regarding potential gains or losses, options to minimise the likelihood of any issues arising on these grounds would include addressing these concerns in the conflicts section of the delegation agreement itself, as well as including disclosures and representations in the offering document of the relevant AIF. The exemptions discussed below are also relevant.

There are exemptions to the general prohibition on delegation where this may lead to a potential conflict of interest included in the AIFMD itself15 where (a) the portfolio or risk management function may be considered to be functionally and hierarchically separated from other potentially conflicting tasks and (b) where potential conflicts of interest are deemed properly identified, managed, monitored and disclosed to the investors of the AIF. The Regulation addresses these considerations further16. It provides that the former issue may be deemed satisfied where:

(Video) AIFMD Review: what's at stake?

a. persons engaged in portfolio management tasks are not engaged in the performance of potentially conflicting tasks such as controlling tasks;

b. persons engaged in risk management tasks are not engaged in the performance of potentially conflicting tasks such as operating tasks;

c. persons engaged in risk management functions are not supervised by those responsible for the performance of operating tasks;

d. the separation is ensured throughout the whole hierarchical structure of the delegate up to its governing body and is reviewed by the governing body and, where it exists, the supervisory function of the delegate.

In relation to point (b) above, the identification, management, monitoring and disclosure requirements will be deemed satisfied only where:

a. the AIFM ensures that the delegate takes all reasonable steps to identify, manage and monitor potential conflicts of interest that may arise between itself and the AIFM, the AIF or the investors in the AIF and that it has appropriate procedures in place for such purposes;

b. the AIFM ensures that the delegate discloses potential conflicts of interest as well as the procedures and measures to be adopted by it in order to manage such conflicts of interest to the AIFM which it in turn discloses to the AIF and its investors as appropriate.

These are further examples of matters which could be documented in a business plan or policy and procedures manual (although in this case the documentation by the delegate, rather than only the AIFM, will also be relevant) and referenced or otherwise addressed in the delegation agreement to ensure compliance.


As mentioned in the section addressing general principles, it will be a requirement for any sub-delegation to be subject to the prior approval of the AIFM17. It can be noted that the Regulation clarifies that a general consent will not be acceptable and instead a specific approval will be needed from the relevant AIFM for any given sub-delegation by its delegate18. The AIFM in turn will be subject to a requirement to notify its Competent Authority and provide it with details of the delegate, the name of the competent authority where the sub-delegate is authorised or registered, the delegated functions, the AIFs affected by the sub-delegation, a copy of the written consent by the AIFM and the intended effective date of the sub-delegation19. The provision in the delegation agreement providing for sub-delegation should accordingly reflect this or provide that sub-delegation will only be permitted in accordance with applicable law.

(Video) AIFMD Video Briefing: Risk Management Provisions and Proportionality

Letter-box entities

One of the specific concerns of the AIFMD is to prevent the use of 窶詫etter-box窶兪entities20. Such concerns have previously been addressed in relation to UCITS, where the 窶惑our eyes窶兪principle now applies. It can be noted that the AIFMD itself specifies that measures would be adopted detailing when an entity would be deemed to constitute a letter-box entity for the purposes of the AIFMD and no longer be considered to be the manager of the relevant AIF. Accordingly the Regulation21 sets out a series of such relevant circumstances and key considerations in this regard include where:

  1. the AIFM no longer retains the necessary expertise and resources to supervise the delegated tasks effectively and manage the risks associated with the delegation;
  2. the AIFM loses its contractual rights to inquire, inspect, have access or give instructions to its delegates or the exercise of such rights becomes impossible in practice; and
  3. the AIFM delegates the performance of investment management functions to an extent that exceeds by a substantial margin the investment management functions performed by the AIFM itself. A series of criteria are included in the Regulation to be used as a guide in this regard.

It can be noted that 窶亙nvestment management functions窶兪are defined in the AIFMD to include both portfolio and risk management, so it is expected that the AIFM would retain one of these functions to ensure it meets this requirement and in fact the explanatory memorandum to the Regulation 2 specifically provides that when appointing a delegate the AIFM:

窶徂as to perform at least functions relating to either risk or portfolio management窶掟/p>

In practice it would be anticipated that most AIFMs operating the delegation model would retain the risk management function to meet this requirement, especially in funds with a high level of trading. The manner in which this obligation was met on an on-going basis will be detailed in the procedures manual or business plan of the relevant AIFM applicable to a given AIF. In cases where relatively few
investment decisions are made, such as private equity, property or venture capital schemes it may be determined not to appoint a third party investment manager as a delegate and instead to appoint it in an ancillary capacity, with the AIFM itself retaining responsibility for discretionary investment management decisions, provided the necessary requirements can be met.

At the same time, the Regulation provides that determinations regarding whether an entity is a mere 窶詫etter-box窶兪will be based on the structure as a whole, bearing in mind a range of factors including the types of assets held by the relevant AIF22.

It can be noted that the Commission intends to monitor the application of this Article in the light of market developments and shall review the situation after two years to see if it is necessary to further specify conditions under which an AIFM shall be deemed to have delegated its functions to the extent that it becomes a letter-box entity23. ESMA may also issue guidelines to ensure a consistent assessment of delegation structures across the European Union24.

Compliance with these requirements will entail (a) ensuring that the delegation agreement affords sufficient oversight powers to the AIFM and that the delegation only pertains to portfolio or risk management and not both; and (b) ensuring that the AIFM has the necessary expertise and resources, details of which are documented appropriately

Summary of compliance steps for delegation under AIFMD

The following is a brief overview of the key points to be addressed to ensure compliance with the requirements relating to delegation under the AIFMD:

(Video) AIFMD Video Briefing: Liquidity Management

  1. ensure the draft written delegation contract (typically an investment management agreement) reflects the specific relevant requirements under the AIFMD;
  2. ensure on-going obligations of the AIFM are addressed and documented in a procedures manual or business plan of the AIFM;
  3. ensure the delegation is objectively justified based on the criteria in the Regulation and document the rationale for this;
  4. ensure the proposed delegate meets the relevant requirements under the AIFMD;
  5. ensure on-going obligations of the delegate under the AIFMD are addressed and documented in its procedures manual or business plan, where necessary;
  6. prepare an appropriate conflicts of interest policy


What is a delegated investment manager? ›

Delegated investment management combines strategic advice and implementation. Typically, a mandate involves the ongoing management of most or all of the assets of a pension or endowment fund, managed to an objective and risk level set by the plan sponsor or pension committee.

Can an AIFM delegate risk management? ›

In order to avoid conflicts of interests, the AIFM may not delegate portfolio or risk management functions to the depositary or to a delegate of the depositary, or to any other entity whose interests may conflict with those of the AIFM.

What is portfolio management under AIFMD? ›

Portfolio management has an important function, not only in the case of an external service AIFM, but also in general. It is the decision-making function for investment and de-investment decisions in the AIFs.

Can an AIFM be an investment manager? ›

An Alternative Investment Fund Manager (AIFM) is any legal person whose regular business is managing one or more alternative investment funds (AIFs).

What can be delegated in management? ›

Delegation refers to the transfer of responsibility for specific tasks from one person to another. From a management perspective, delegation occurs when a manager assigns specific tasks to their employees.

Is an investment manager the same as an advisor? ›

Portfolio Managers build and maintain investment portfolios, while investment advisors sell a specific product. 1 Investment advisors play an important role in the financial markets, but are not in a position to support the needs of a client's long-range financial objectives. That's the job of the Portfolio Manager.

What risk is delegation of authority? ›

High levels of discretion assigned to a single individual can result in end-to-end control of a process, which can create an unacceptable risk of partiality, bribery or other corruption.

How is management authority delegated? ›

The delegation of authority refers to the division of labor and decision-making responsibility to an individual that reports to a leader or manager. It is the organizational process of a manager dividing their own work among all their people.

How delegation of work can put a project at risk? ›

If you delegate improperly, projects may fail - or work may not get done. On the other hand, there may come a time when your project, and ultimately you, will suffer the consequences of an inability to let go. Still, learning to overcome the "not invented here (and by me)" syndrome can be difficult.

What does the AIFMD set requirements of? ›

Some of the requirements of the AIFMD include: Business conduct including identifying conflicts of interest, fairness toward investors, full and complete disclosure, risk management, and remuneration. Minimum capital requirements including initial capital and total assets under management (AUM)

What are AIFMD rules? ›

The AIFMD aims to create a harmonised regulation framework for alternative funds distributed in the European Union (EU). The AIFMD has the objective of regulating the alternative investment fund managers and the distribution of AIFs in the European Union in order to ensure investor protection and avoid systemic risk.

What is Article 42 of the AIFMD? ›

Changes to the Article 42 AIFMD NPPRs

The Commission's AIFMD II proposal deletes the reference to the FATF list and instead requires that the non-EU AIFM and non-EU AIF cannot be domiciled in a “high risk jurisdiction” pursuant to the EU Anti-Money Laundering (AML) Directive (Directive (EU) 2015/849) (EU AML List).

What is the difference between an investment manager and a fund manager? ›

Both investment manager and fund manager perform similar duties towards investment decisions. A fund manager is responsible for implementing a fund's investment strategy. An investment manager is responsible for making investments on behalf of their clients.

Do investment managers have to be regulated? ›

The SEC regulates investment advisors over $110 million in assets under management (AUM). Advisors who manage assets below this level are required to register with their states, as well as any representatives of investment advisors.

Is there a difference between asset manager and investment manager? ›

Asset managers and investment managers both aim to make decisions that earn their clients the most profit possible. Asset management focuses on handling a client's physical assets, while investment management is a more general term for handling a client's investments.

What are the 4 types of delegation? ›

Types of Delegation of Authority
  • General or Specific Delegation. It is based on the job assigned.
  • Formal or Informal Delegation. It is based on the process of giving authority.
  • Top to bottom or bottom to top Delegation. It is based on the hierarchy.
  • Lateral Delegation. It requires a group or team to work in parallel.

What are the 5 rules of delegation? ›

Five Rights of Delegation
  • About the Five (5) Rights of Delegation.
  • Right Task.
  • Right Circumstances.
  • Right Person.
  • Right Direction/Communication.
  • Right Supervision/Evaluation.

What are 4 tasks that Cannot be delegated? ›

What Can't Be Delegated in Community Based Nurse Delegation
  • Administration of medications by injection (by intramuscular, intradermal, subcutaneous, intraosseous, intravenous, or otherwise) with the exception of insulin injections.
  • Sterile procedures.
  • Central line maintenance.
  • Acts that require nursing judgment.

Who appoints investment manager? ›

Customer may, from time to time, appoint one or more investment managers (each an "Investment Manager") to manage the Property in the Account, to vote securities in the Account, to purchase, sell or otherwise acquire or dispose of Property in the Account, and to engage in foreign exchange transactions on behalf of ...

What are the five activities of an investment manager? ›

An investment manager may handle all activities associated with the management of client portfolios, from day-to-day buying and selling of securities to portfolio monitoring, transaction settlement, performance measurement, and regulatory and client reporting.

What are the responsibilities of an investment manager? ›

The role of an investment manager involves financial planning, undertaking research, investing, day-to-day buying and selling of securities, portfolio monitoring and more. They, first, analyse your current financial status and accordingly set reasonable financial goals.

What are 3 disadvantages of delegation? ›

The disadvantages of delegation
  • #1 Quality of work can suffer. ...
  • #2 Lack of employee confidence. ...
  • #3 Potential extra costs for staff training. ...
  • #4 It can lead to frustration. ...
  • #1 It can save time for everyone.
  • As a leader of a growing business, you properly know you're spinning too many plates. ...
  • #2 Growing team and business.
13 Jun 2022

What are the 3 elements of delegation? ›

Delegation is an organisational procedure that requires entrusting others with tasks. There are three elements of Delegation: Assignment of Responsibility, Grant of Authority, and Creation of Accountability.

Why does delegation of authority fail? ›

Fear of reputation risk: Some leaders failure to delegate is fear of reputation risk. Some leaders fear that delegating will be perceived as failing to work hard or downloading work to team members. Other leaders fear that work done by team members won't meet their standards.

What Cannot be delegated in management? ›

According to the principle of absolute responsibility, authority can be delegated but responsibility and accountability cannot be delegated by a manager.

What is an example of delegation of authority? ›

You can give one of your employees the power to make certain decisions so that you can focus on other work. For example, as a marketing director, you could delegate authority to the assistant marketing director to hire employees for the department when needed.

Why delegation of authority is necessary in management? ›

Delegation of authority helps develop the capacity of others and makes them feel valuable to the organization. It also encourages job satisfaction through a sense of shared responsibility and breaks the monotony of a subordinate's usual tasks and routine.

What are the 6 steps in the delegation process? ›

Here are the six steps you should work through when delegating:
  1. Prepare. Employees can't deliver quality results if the task delegated to them isn't fully thought out, or if expectations keep changing. ...
  2. Assign. ...
  3. Confirm understanding. ...
  4. Confirm commitment. ...
  5. Avoid “reverse delegating” ...
  6. Ensure Accountability.
3 Jun 2013

How do you ensure the delegated tasks are successfully performed? ›

How to Delegate Tasks Effectively
  1. Choose the right person for the job. ...
  2. Explain why you're delegating. ...
  3. 3. Provide the right instructions. ...
  4. Provide resources and training. ...
  5. Delegate responsibility *and* authority. ...
  6. Check the work and provide feedback. ...
  7. 7. Say thank you.

What are the 5 advantages of delegation? ›

So, What Are the Main Benefits of Delegation?
  • Freeing up your time & achieving more. ...
  • Developing your team. ...
  • Establishing a culture of trust. ...
  • Making the team more efficient. ...
  • Increase the flexibility of your team. ...
  • Figure out what work you want to delegate. ...
  • Establish priorities. ...
  • Align tasks to your employees' strengths.
27 Jul 2016

What is the purpose of AIFMD reporting? ›

The purpose of AIFMD reporting is to effectively monitor and prevent systemic risk and market disruptions. The reporting obligation applies to registered and authorised AIFMs, and to those AIFMs that are established in a third country (non-EEA country), which market in Finland the AIFs they manage.

Are alternative investment funds regulated? ›

Historical Data. Definition : In India, alternative investment funds (AIFs) are defined in Regulation 2(1) (b) of Securities and Exchange Board of India (Alternative Investment Funds) Regulations, 2012.

Is an AIFM an investment firm? ›

An AIF is a 'collective investment undertaking' that is not subject to the UK UCITS regime, and includes hedge funds, private equity funds, retail investment funds, investment companies and real estate funds, among others.

What is risk management AIFMD? ›

The AIFMD and its delegated regulation (Level 2) oblige an AIFM to identify, document, measure and monitor all risks that are relevant for each of its AIFs with adequate frequency. Risks that have to be monitored generally include market, credit, liquidity, counterparty and operational risks.

What are alternate investment funds? ›

Alternative investment funds refer to funds that include hedge funds, venture capital, private equity, angel funds, real estate, commodities, collectibles, structured products, etc. Alternative investment funds are an alternative to traditional investment options (stocks, bonds, and cash).

Does assets under management include cash? ›

Assets under management (AUM) is the total market value of the investments that a person or entity manages on behalf of clients. Assets under management definitions and formulas vary by company. In the calculation of AUM, some financial institutions include bank deposits, mutual funds, and cash in their calculations.

What does Title 42 regulate? ›

Title 42 of the Public Health Services Act is a public health authority that authorizes the Director of the Centers for Disease Control and Prevention (CDC) to suspend entry of individuals into the U.S. to protect public health.

What is an Article 23 disclosure? ›

Under Article 23 of AIFMD, for each EU AIF an EU AIFM manages and for each AIF either an EU AIFM or a non-EU AIFM markets in the EU, AIFMs must make certain information available to investors before they invest in the AIF, together with any updates.

What is Annex 4 reporting? ›

Under Annex IV of AIFMD, all authorised and registered fund managers must report transparency information on their funds to local regulators for each country they market in. But this isn't a simple process – reporting requirements differ for each jurisdiction and the nature of the fund.

Can anyone be a fund manager? ›

These vary from state to state, but the bare minimum would be a bachelor's in business or accounting. A master's in finance, accounting, or business administration may also be necessary or, at the very least, helpful in opening up the path to becoming a hedge fund manager.

What are investment managers called? ›

Asset managers are known by many names: investment advisors, financial advisors, wealth managers, institutional wealth managers, registered investment advisors (RIAs), robo-advisors and stockbrokers, to name just a few.

Are investment managers well paid? ›

What Do Investment Management Jobs Pay? The median annual pay for financial managers was $131,710 per year in 2021, according to the U.S. Bureau of Labor Statistics. The top 10% of earners made a median annual pay of $208,000 — 4.5 times the median annual pay for all professions ($45,760).

Can you manage investments without a license? ›

What License Do You Need to Invest Other People's Money? Overall, to invest other people's money means you need to be a registered investment adviser with the state or Securities & Exchange Commission (SEC).

Do investment managers have fiduciary duties? ›

ERISA explicitly grants fiduciary status to investment managers,7 assigning them and their client special protections. Financial advisors become fiduciaries under a catchall provision.

What is investment management compliance? ›

Investment Compliance ensures that a business adheres to internal controls and external rules. Investment Compliance work to meet key regulatory objectives in order to protect investors and ensure that markets are fair, efficient and transparent.

Is an investment advisor the same as an investment manager? ›

Common names for investment advisers include asset managers, investment counselors, investment managers, portfolio managers, and wealth managers. Investment adviser representatives are individuals who work for and give advice on behalf of registered investment advisers.

Is an asset manager an investment advisor? ›

An asset manager focuses on your investments and may be referred to as an investment advisor, financial advisor, registered investment advisor (RIA), robo-advisor or even an investment broker.

Is a fund manager an investment advisor? ›

An investment adviser, or “fund manager,” is typically responsible for overseeing the fund's daily operations and managing the fund's assets while adhering to the fund's investment objectives.

What is the role of an investment manager? ›

The Investment Manager is responsible for developing strategies for managing a significant portfolio of investments, including meeting with fund managers, preparing and reporting on the analysis of investments and investment strategies, working with the University's investment advisors; assists in the analysis of a ...

What is the difference between delegation and micromanagement? ›

Delegation Versus Micromanaging

While delegating is considered to be the good and essential way of managing a business or team, micromanaging is widely viewed as negative. As your business grows, it becomes difficult to manage everything single-handedly. So, you start hiring employees to help you.

What is the difference between an investment manager and a portfolio manager? ›

Investment advisors encompass professionals that can help you with investment management, retirement planning, estate management, tax management, budgeting, debt management, etc. Portfolio managers are typically more focused on helping you invest and managing your investment portfolio.

What are 4 responsibilities tasks of an investment fund manager? ›

A fund manager is responsible for implementing a fund's investment strategy and managing its trading activities. They oversee mutual funds or pensions, manage analysts, conduct research, and make important investment decisions.

What are 4 types of investments? ›

There are four main investment types, or asset classes, that you can choose from, each with distinct characteristics, risks and benefits.
  • Growth investments. ...
  • Shares. ...
  • Property. ...
  • Defensive investments. ...
  • Cash. ...
  • Fixed interest.

What skills do you need in investment management? ›

What skills do you need?
  • Ability to establish rapport and trust with the client.
  • High levels of numeracy to understand financial data.
  • Analytical ability to make sense of a wide range of information relevant to investments.
  • Ability to work effectively under pressure.

At what point can delegation become micromanagement? ›

The first sign of micromanaging is when delegating a project you also delegate the specifics of the solution. While that makes sense in some fields, in creative or information work, being told up front the steps to follow makes one feel like a vendor and not a partner in the work.

How do I delegate without micromanaging? ›

How to delegate without micromanaging
  1. Avoid being overly-detailed when you can.
  2. Set clear goals, expectations, and benchmarks.
  3. Delegate with careful evaluation.
  4. Let the delegatee control the progress.
  5. Respect and connect.
  6. Don't try to correct in an extreme manner.
14 Sept 2021

Can a financial advisor be a fund manager? ›

An investment adviser, or “fund manager,” is typically responsible for overseeing the fund's daily operations and managing the fund's assets while adhering to the fund's investment objectives.

Is an investment manager an asset manager? ›

Investment managers, also known as fund managers and asset managers, seek to make their clients' money grow so that they can achieve their goals and aspirations, to help offer a more comfortable future.

What is the meaning of investment management? ›

Investment management refers to the handling of financial assets and other investments—not only buying and selling them. Management includes devising a short- or long-term strategy for acquiring and disposing of portfolio holdings. It can also include banking, budgeting, and tax services and duties, as well.


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