Fund managers primarily see the European Union’s upcoming Alternative Investment Fund Managers Directive (AIFMD) as a cost and compliance overhead, according to a recent survey.

The study, conducted by the Chicago-based banking group Northern Trust, also found that a third of those surveyed—the bank quizzed approximately 130 of its fund manager clients, prospective clients and consultants—felt that the AIFMD was creating uncertainty and challenges for their business.

Due to take effect from July, the AIFMD, which was first mooted in 2009, has been heavily criticized for its potential to stifle Europe’s fund management industry by ramping up complexities and costs for hedge funds.

Just 10% of those surveyed by Northern Trust saw the AIFMD as a strategically important opportunity for their business.

The primary benefit of the AIFMD for asset managers is the creation of a pan-European passporting regime, making distribution easier. In order to secure the passport, though, alternative investment fund managers and alternative investment funds must comply with the new regulations—in the areas of depositaries, operations and transparency, and governance.

“The AIFMD will ultimately affect every fund manager and their investors in Europe,” said Ian Headon, head of product development at Northern Trust’s hedge fund services unit.

“However, the majority [of those surveyed] cited that their AIFMD implementation projects are in the preliminary stages and feel that their investors are not engaged.”

He added: “There is still more work to be done and more clarity around the directive required.”

Although at least one major bank is putting in place a raft of new services to help the fund management industry deal with the upcoming AIFMD changes.

BNP Paribas has expanded its global set-up for AIFMD with the recent opening of a Netherlands office, as well as the launch of a trustee and depository service in the UK.

“The final countdown to AIFMD coming into effect has started, but however well prepared fund managers believe they are for this implementation, it is still a far cry from reality,” said James McAleenan, head of BNP Paribas Securities Services in the U.K..

“With four months to go, we continue to urge clients to accelerate the final phases of preparation for what we deem will be a significant re-shape of the alternative fund management industry in Europe and beyond.

“Beyond the new infrastructure requirements, AIFMD also mandates to segregate risk management and valuation functions from portfolio management. This is why our solution includes a full range of services around valuation of complex products and alternative assets such as real estate, and collateral management.”

Proponents of the AIFMD say that it will establish a strong European standard for alternative funds that will largely improve trust levels of investors and all stakeholders in this segment of the industry.