Date Published 18/11/2021
New AIFMD and MiFIR Q&As available
On 20 July 2021ESMA updated its Questions and Answers on the AIFMD and MiFIR as well as other areas including UCITS and the prospectus directive.
The update relating to the AIFMD relates to performance fees and is as follows:
Question: In case the authorised AIFM has delegated the portfolio management function to different delegated portfolio managers, would it be admissible to pay a performance fee to those delegated portfolio managers who have overperformed during the performance reference period, despite a global underperformance of the fund during the same performance reference period?
Answer: No. Based on paragraph 37 of the guidelines, performance fees: – should be paid only where positive performance has been accrued during the performance reference period; – could be paid in case the fund has overperformed the reference benchmark but had a negative performance. The above also applies in case of delegation by the authorised AIFM to different delegated portfolio managers. Therefore, in case of a global underperformance of the fund, performance fees should not be paid to those delegated portfolio managers who have overperformed.
Question: In case of creation of a new compartment/share class in an existing AIF in the course of its financial year or in case of creation of a new AIF, can performance fees be crystallised after less than 12 months from the date of creation of such a new AIF/compartment/share class?
Answer: No. Performance fees, if any, should be crystallised after at least 12 months from the creation of a new AIF/compartment/share class. Moreover, paragraph 35 of the guidelines foresees that the crystallisation date should be the same for all share classes of a fund that levies a performance fee
The updates pertaining to MiFIR relate to the LEI.
Action: No Action required. However, this may have implications for the calculation and future payment of performance fees relating to the ICAV.