The Alternative Investment Fund Directive

Much has been published on the newly proposed Alternative Investment Fund Directive ('AIFM') which if it materialises in its proposed form would affect all fund managers in Europe who manage or market a fund which is not regulated in Europe as suitable for retail sales (effectively, any non-UCITS fund). This would include not only funds in their purest form, but any arrangement that can be characterised as a 'collective investment undertaking' that is either managed in Europe or is seeking investors in Europe.

The burdens of the AIFM are weighty and include among other things, rules relating to suitable qualification, risk management, liquidity management, the management of conflicts, and prescriptive disclosure to potential investors while the benefit on the flip side would be easier marketing to professional investors (as defined by MiFID) but this is of little comfort to most managers.