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Alternative Investment Fund Managers - EUR-Lex

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Alternative Investment Fund Managers - EUR-Lex

The activities of alternative investment fund managers account for significant amounts of trading on financial markets. Such activities may, however, contribute to increasing the risks facing financial systems or to heightening such risks. This Directive therefore aims at creating a harmonised regulatory and supervisory framework for alternative investment fund managers.


Directive 2011/61/EU of the European Parliament and of the Council of 8 June 2011 on Alternative Investment Fund Managers and amending Directives 2003/41/EC and 2009/65/EC and Regulations (EC) No 1060/2009 and (EU) No 1095/2010 (Text with EEA relevance).


This Directive aims at framing the activities of managers of Alternative Investment Funds (AIFs). The goal is to create an internal market for these managers whilst putting in place a harmonised regulatory framework.

The Directive does not apply to:

  • holding companies;
  • institutions for occupational retirement provision;
  • supranational institutions;
  • national central banks;
  • national, regional and local governments;
  • employee participation systems or employee savings schemes;
  • securitisation special purpose entities.

Conditions for the authorisation of AIFMs

Alternative Investment Fund Managers (AIFMs) are entrusted with the portfolio management and risk management of AIFs. They may additionally perform duties of administration and marketing.

In order to carry out their activities, AIFMs must apply to the competent authorities of their home Member State for authorisation, and provide information concerning:

  • the persons conducting the business of the AIFM;
  • the identities of the AIFM’s shareholders and direct or indirect members;
  • a programme of activity;
  • remuneration policies and practices;
  • arrangements made for the delegation to third parties of AIFM functions.

They must also submit information on the AIFs they intend to manage, namely:

  • investment strategies;
  • where the AIF is established if the AIF is a feeder AIF*;
  • the rules or instruments of incorporation;
  • arrangements made for the appointment of the depositary.

Where the AIFM is an internally managed AIF, it must have an initial capital of at least EUR 300 000, whereas an external manager of AIFs must provide capital of at least EUR 125 000.

Operating conditions for AIFM activities

AIFMs entrusted with portfolio management are not permitted to invest all or part of the client’s portfolio in units or shares of the AIFs they manage. They must comply with the Directive on investor-compensation schemes . They may delegate their duties provided that they notify the competent authorities of their home Member State.

Remuneration policies practised by AIFMs must not encourage excessive risk taking. The European Securities and Markets Authority (ESMA), in cooperation with the European Banking Authority (EBA), ensures that remuneration practices comply with the principles laid down in:

AIFMs must separate in functional and hierarchical terms risk management tasks from operational units, and from portfolio management. At least once a year, they must scrutinise the risk management systems put in place.

AIFMs must adopt procedures which enable them to monitor the AIF’s liquidity risk and guarantee the compliance of the liquidity profile of the investments of the AIF. AIFMs are to conduct stress tests regularly.

AIFMs are to put in place appropriate and coherent valuation procedures. AIFMs must comply with the law of the country in which the AIF is established, with respect to asset valuation and the calculation of the net asset value per unit or share of the AIF.

For each AIF that they manage, AIFMs shall appoint a single depositary, the main task of which is to monitor the AIF’s cash flow. The depositary may be:

Transparency requirements

AIFMs are to publish an annual report for each financial year for each of the AIFs they manage and for each of the AIFs they market, no later than 6 months following the end of the financial year. The annual financial report shall be published pursuant to the Directive on the transparency of information.

Vis-à-vis investors, AIFMs must make the following information available to them, namely:

  • a description of the AIF’s investment strategy and objectives;
  • a description of all fees, charges and expenses;
  • a description of the main legal implications of the contractual relationship;
  • the identity of the AIFM, the AIF’s depositary and auditor;
  • the identity of the prime broker.

In addition, AIFMs must periodically disclose to investors:

  • the percentage of the AIF’s assets subject to special arrangements;
  • any new arrangements for managing the liquidity of the AIF;
  • the current risk profile of the AIF.

The competent authorities of the AIFM’s home Member State must also be kept abreast of the principal markets and instruments where they trade on behalf of the AIFs they manage.

AIFMs managing specific types of AIF

This Directive distinguishes two types of AIFMs:

  • AIFMs managing leveraged AIFs (leverage is the effect on financial yield of different extents of the use of debt): the competent authorities of the AIFM’s home Member State must use the information that the AIFM provides in order to determine whether leverage contributes to increasing systemic risk in the financial system. In return, the AIFMs must demonstrate that the leverage limits set for each AIF they manage are reasonable.
  • AIFMs managing AIFs which acquire control of non-listed companies and issuers (control shall mean more than 50 % of the voting rights of the companies): AIFMs must notify the following of the acquisition of control:

Rights of EU AIFMs to market and manage AIFs

AIFMs may market units or shares of any AIF that they manage. In that case, they must notify the competent authorities of their home Member State in respect of each AIF that they intend to market. The documentation to be provided is set out in Annex IV.

Specific risks in relation to third countries

AIFMs are permitted to manage third country AIFs which are not marketed in the EU provided that certain rules are complied with and that cooperation arrangements are in place between the competent authorities of the home Member State of the AIFM and the supervisory authorities of the third country where the AIF is established.



Entry into force

Deadline for transposition in the Member States

Official Journal

Directive 2011/61/EU



OJ L 174 of 1.7.2011


Commission Delegated Regulation (EU) No 231/2013 of 19 December 2012 supplementing Directive 2011/61/EU of the European Parliament and of the Council with regard to exemptions, general operating conditions, depositaries, leverage, transparency and supervision [OJ L 83 of 22.3.2013]: the present delegated regulation supplements certain elements of the directive on alternative investment fund managers. It defines uniform rules on:

  • the conditions and procedure for defining alternative fund managers and for governing their authorisation, notably the applicable requirements concerning own funds;
  • the operating conditions for managers, notably rules on remuneration, conflicts of interest, risk and liquidity management as well as valuation and investment in securitisation positions;
  • the conditions for delegating manager functions;
  • the rules on depositaries, notably their tasks and responsibilities;
  • the detailed requirements concerning the calculation of managed assets, the methods and the calculation of leverage;
  • the reporting obligations as regards competent authorities and investors;
  • the rules covering cooperation arrangements with third countries.

The regulation came into force on 11 April 20113 and has been applicable since 22 July 2013.