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ARTICLE · 20 JUNE 2024

AIFMD II: European AIFMs Get Ready To Review Liquidity Tools

Osborne Clarke LLP
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The Alternative Investment Fund Managers Directive (AIFMD II) was published in November 2023 and one area of evolution is an increased emphasis on open-ended alternative...

GlobalFinance and Banking
Simon Thomas
Simon Thomas
Helen Parsonage
Helen Parsonage
Tim Simmonds
Tim Simmonds
Alison Riddle
Alison Riddle
David Soerensen
David Soerensen
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The Alternative Investment Fund Managers Directive (AIFMD II) was published in November 2023 and one area of evolution is an increased emphasis on open-ended alternative investment funds' liquidity management. Policymakers have stressed the importance of proper liquidity risk management to mitigate against the adverse consequences liquidity mismatches can cause for investors and the wider financial markets. The solution has been the introduction of the mandatory application of liquidity management tools (LMTs) in a somewhat prescribed manner, and all that underpins them.

What are the new liquidity management requirements?

AIFMD II applies to alternative investment fund managers (AIFMs) from the European Economic Area. While it does not apply to AIFMs from the UK, it will affect UK managers that, for example, use the services of host AIFMs in Luxembourg and Ireland.

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