Monday 24th June 2013

Frostrow Capital to become an AIFM

Frostrow Capital LLP (“Frostrow”), the independent investment trust group, today announces its intention to vary its regulatory permissions so that it can take on the role of Alternative Investment Fund Manager (‘AIFM’) a new role compulsory for Investment Companies under the Alternative Investment Managers Directive (‘AIFMD’).This will considerably broaden its service offering to the Investment Company sector and enhance the corporate management and marketing services that it provides to its clients.

Under AIFMD, investment companies must appoint an AIFM who is responsible for:

  • Investment management; and
  • Risk management.

Frostrow already provides a risk management service to its clients, together with the administrative aspects of investment management. In order to comply with AIFMD Frostrow will outsource stock picking to specialist investment management firms who may be located anywhere in the world. By applying to the FCA for the relevant permissions Frostrow is creating an attractive option for investment managers and importantly an independent option for boards who are considering who will provide their company’s AIFM function.

Alastair Smith, Managing Partner, Frostrow Capital said:

“We believe that an attractive option for investment company boards is to appoint a party who is independent from the fund management team as their company’s AIFM. Having a separate entity providing this function removes the potential for a conflict of interest should the fund management team be in the direct employment of the AIFM itself.

Frostrow further believes that a third party AIFM could be beneficial to investment managers that do not want to take on the extra regulatory burden that AIFM gives rise to, overseas managers that are promoting funds in the UK that do not wish to become regulated by the FCA or for investment company boards who wish to maintain their independence from their fund management team.”