What is the AIFM Directive?

An alternative investment fund manager (AIFM) is a legal entity whose regular business is to manage one or more alternative investment funds (AIF). The AIFM Directive regulates all managers of open-ended and closed-ended funds that are not already regulated under the UCITS Directive. Unlike the UCITS Directive, which regulates funds, the AIFM Directive regulates the manager rather than the fund, with a few exceptions. The aim is to increase transparency for investors and regulators about the activities of managers and the funds they manage. A major advantage for AIFMs is the EU passport. It allows an AIFM to market AIFs to professional investors within the EU or the EEA. For retail clients, AIFMs and AIFs must continue to comply with the national frameworks of each EU country. Classic AIF investments include real estate, private equity, venture capital and hedge funds.