How have CISA rules impacted
the hedge fund industry since its inception 1 March?
Roman Pelka (RP):
To the surprise of some, life and fundraising in Switzerland goes on six months into the
new regime. Managers have adjusted to the new rules and continue to raise capital from qualified Swiss investors.
This is not surprising as it is a good time to raise capital. Fundraising conditions globally are as good as they have been since the great recession. Consequently, we are seeing strong demand for our Swiss representation service from foreign managers who want to market to Swiss investors to broaden their asset base.
What are the highlights of the new Swiss rules?
In practice, the process for qualified investor funds involves the appointment of a Swiss representative and paying agent.
What are the key differences between AIFMD and CISA?
Compared to AIFMD, CISA is less invasive – there is no regulatory reporting, no depository requirement and no compensation rules, to give just some examples. The requirements can be satisfied without altering the structure of a typical hedge fund set up, for example, an offshore fund with an advisor located in one of the major financial centres.
Economically the exercise pays off for the fund manager as long as at least $1m is raised from Swiss investors.
How do you see the fundraising landscape in Switzerland today in a European context?
Obviously, the fundraising landscape in Switzerland is not as good as it was before the global financial crisis. But this is the case globally. The market in Switzerland has changed, and in many respects for the better. I still often hear the old assertion that Switzerland is all about “fast” fund of fund money. But I think those managers who did their homework will know
better. Switzerland is still the third largest market for alternatives and has a diverse investor universe. Besides the well-known fund of funds, there is also a number of family offices, pension funds, private banks and wealth managers who increasingly look at alternatives. There is something for everybody, large and small.