The Directive significantly affects the practical corporate organisational structure of AIFMs and the non-UCITS sector, including hedge funds, private equity and real estate funds.
AIFMD must comply with the specific directive in relation to conflict of interest, risk management and liquidity management requirements.
Ensure that all AIFMs are subject to appropriate authorisation and regulatory requirements.
Provide a structure to monitor prudential risks through periodic reporting obligations.
Guarantee proper monitoring and control of prudential risks.
Provide a common approach to protect professional investors.
Improve AIFM accountability.
Build a single European AIF market.
Implications for AIFMD
Managers who are indirectly appointed to take investment decisions or provide risk management services to AIFs can be subject to the AIFMD.
Applying the AIFMD equips alternative investment managers with significant flexibility to choose the operating model that best suits their investment needs and strategies.
The Directive mainly focuses on regulating the Manager.
To become an AIFM, an entity must submit an application and receive authorisation from the Sector Supervisory Committee in the member state. The application must include information about AIFM’s senior management, their shareholders and the AIFs, stating their intention to manage and prove how the entity will comply with the AIFMD requirements.
Definition of Alternative Investment Fund (AIF)
The following investment vehicles can be classified as AIFs under the AIFMD:
Collective Investment Schemes (CISs) under Heading II of the Act of 17 December 2010.
Specialist Investment Funds (SIF) under the Act of 13 February 2007, amended version.
Venture Capital Investment (VCI) companies, under the Act of 15 June 2004, amended version.
Other vehicles that are currently not regulated but which fulfil AIF criteria can be classified as an AIF.