The Alternative Investment Fund Managers Directive or ‘AIFMD’ for short, is a European Union (EU) wide regulatory framework introduced in 2013. It has also been adopted in UK domestic legislation and is applicable to alternative investment funds, including real estate funds, in the EU and UK. The framework lays out a set of rules for fund managers around internal organisation, the marketing of funds and raising private capital, remuneration policies, risk monitoring and reporting, overall accountability and, more recently, sustainability related disclosures.
The main aims of the directive are:
- To protect investors by introducing stricter compliance around how and what information is disclosed, and
- To remove some of the systemic risks these funds can pose to the EU economy.
One approach mandated by AIFMD is that remuneration policies must be structured in a way that does not encourage excessive risk-taking, that financial leverage is reported to financial authorities and that funds have robust risk management systems that take liquidity into account. A major benefit of the directive has been the introduction of an EU passport for marketing and managing funds.
INREV supports the directive’s principles and objectives in general and has engaged with the European policy makers as the directive has evolved, including the current review by the European Commission.
Click here to view INREV’s responses to the various consultations issued around AIFMD and read the latest ‘Letter from Brussels’ for more insights on the proposed changes to the directive.
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