The majority (82 per cent) of fund managers feel that heavy regulation is the main issue facing the industry over the coming 12 months, according to research by KNEIP.

The figures are based on the results of a recent survey of KNEIP clients, which gathered the thoughts of more than 130 fund companies worldwide.

Mario Mantrisi, chief strategy and research officer at KNEIP, says: “Ensuring compliance with changing legislation is fast becoming the priority for fund managers. Given the pace and volume of new measures over recent years, it is unsurprising that this has been identified as the key challenge in 2013.”

Respondents to the KNEIP survey were also asked to rank which specific pieces of regulation they feel will have the most impact on the fund management industry, with 57 per cent of managers listing Alternative Investment Fund Managers Directive (AIFMD) above the likes of Ucits V, Solvency II and MiFID II.

The survey also showed that 40 per cent of asset managers are unprepared for the impact of AIFMD, which will become law in every EU member state by July 2013.

“After a long and involved consultation period, AIFMD will soon come into effect and will be a watershed moment for the alternatives industry. While larger alternatives houses may have the resources to fulfil the new transparency and reporting requirements, smaller managers may struggle. There is an understandable concern that AIFMD will be a time burden that may impact their core business capabilities and as the deadline approaches, many managers will now be considering external help,” says Mantrisi.