Many of Europe's asset management firms are not ready for the implementation of new investment transparency rules under the new Ucits IV directive, according to research by PricewaterhouseCoopers.

A PwC survey found that 58% of fund managers have not considered the cost implications of changes to their systems and controls to implement the 'key information document' (KID), a two-page document every fund must have describing its investment strategy and risk profile, which has to be in place from July next year.

"There is concern around the fact that asset managers aren't ready to get it done," said Ken Owens, asset management partner at PricewaterhouseCoopers Ireland and one of the report's authors. "We are only now starting to see activity on how to calculate the risk indicator."

More than three-quarters of fund managers do not think the risk indicator, which uses a seven-level scale to measure relative risk, will work for all types of Ucits funds. PwC also found the funds industry is not confident the KID will help create a level playing field for funds in Europe by providing comparable and consistent investment information.

The survey comes amid growing concerns in the industry that the new directive could drive hedge funds out of the Ucits framework just as alternative investments begin to embrace trans­parency.

Ireland is a major international centre for domiciling Ucits funds. There are over 2,700 Irish Ucits funds with a net asset value of €611bn as of last January.