ESMA Issues Final AIFMD Remuneration Guidelines, Feb 2013

The Alternative Investment Fund Managers Directive (AIFMD) requires that managers (AIFMs) have remuneration policies which are consistent with sound and effective risk management. The AIFM must determine its remuneration policies and practices for staff whose professional activities have a material impact on the risk profiles of the AIFM or the alternative investment funds (AIFs) they manage.

The relevant principles are set out in Annex II to AIFMD and include the following:

• subject to the legal structure and the rules or constitutive documents of the AIF, a "substantial portion" (which is generally at least 50%) of any variable remuneration shall consist of units of the AIF or related instruments;