Welcome Changes To The Irish L-QIAIF Regime

On 7 February 2018, the Central Bank of Ireland announced that it intends to amend the rules governing Loan-Originating Qualifying Investor AIFs, or L-QIAIFs, by broadening the range of activities permitted. 

Background  

In 2014, a specific regulatory regime was introduced by the Central Bank, allowing a new type of fund, namely the L-QIAIF, to originate loans.

At present, L-QIAIFs are restricted from engaging in activities other than lending and related operations. This was viewed as overly restrictive, particularly as L-QIAIFs were not permitted to invest in other assets such as debt or equity.  

In 2017, significant enhancements were made to allow L-QIAIFs to acquire high yield instruments or equity investments issued by those borrowers that the L-QIAIF had granted loans to. Such enhancements are consistent with the central aim of the Capital Markets Union, ie the promotion of alternative sources of non-bank lending to the EU economy.