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ARTICLE · 01 MAY 2026

AIFMD 2 Tightens The Rules For Open-ended Funds

Loyens & Loeff
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The European regulatory framework's distinction between open-ended and closed-ended funds has significant implications for alternative investment fund managers, particularly with AIFMD 2 taking effect in April 2026. This analysis examines how semi-liquid evergreen funds—including rolling-vintage and run-off models—should be classified under EU rules, and why a mechanical application...

European UnionFinance and Banking
Frank van Kuijk
Frank van Kuijk
Benjamin Hitzges
Benjamin Hitzges
Agata Szymoniak
Agata Szymoniak

European Alternative Investment Fund Managers (EU AIFMs) must classify each private fund under management (each an alternative investment fund or AIF) as either closed‑ended or open‑ended. This distinction is key because EU AIFMs managing open‑ended AIFs must be able to demonstrate that investors’ withdrawal rights are aligned with the liquidity profile of the underlying portfolio. This analysis is particularly relevant for funds investing in illiquid assets, where overly flexible redemption terms may force sudden asset disposals at discounted prices, ultimately harming remaining investors.

With AIFMD taking effect on April 16, 2026 this open-ended vs closed-ended distinction will become even more significant. Open-ended funds will, amongst others, be required to hardwire two predefined liquidity management tools (LMTs) to address liquidity pressure in times of market stress and to protect investors. In addition, the new leverage caps applicable to loan‑originating funds will

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