AIFMD

Luxembourg is a dominant player in the non-UCITS market with about 820 authorised or registered AIFMs who have chosen Luxembourg as their domicile. According to EFAMA, the Luxembourg non-UCITS market represents with EUR 560 bn net assets in 2015, a 13% European market share.

ALFI’s alternative investments committee was very active in 2015. Existing sub-committees on hedge funds, real estate investment funds, private equity and venture capital funds, infrastructure funds and on AIFMD reporting have been completed by a cross-sectoral working group on debt funds. Moreover, other technical committees and forums have issued guidelines or brochures on AIFs, such as ALFI’s risk management committee or the ALFI/ABBL depositary bank forum. The various working groups will also work on the upcoming review of the AIFMD due to start in 2017.

In the past year, ALFI was involved in discussions on the Reserved Alternative Investment Fund (RAIF) which will be a complementary regime to the Specialised Investment Fund. The RAIF does not need to be approved by the CSSF, with consequent time-to-market benefits. In order to ensure sufficient protection and regulation via its manager, a RAIF must be managed by an authorised external AIFM. The latter can be domiciled in Luxembourg or in any other Member State of the EU. If it is authorised and fully in line with the requirements of the AIFMD, the AIFM can make use of the marketing passport to market shares or units of RAIFs on a cross-border basis. Shares or units of RAIFs can only be sold to well-informed investors.

ALFI and the Luxembourg Private Equity Association also participated in the EU Commission consultation on the review of the European Venture Capital Funds (EuVECA) and European Social Entrepreneurship Funds (EuSEF) Regulations. ALFI believes reform could make both labels successful. For example, any manager authorised under the AIFMD and complying with one of the two regimes should be allowed to manage, name and market its EuVECA/EuSEF-compliant funds as “EuVECA” and “EuSEF” respectively. Moreover, the registration requirements are often perceived as a hindrance for small managers which do not have the same resources as bigger managers.

Regarding third countries, ESMA will continue to assess non-EU countries which may in the future benefit from the AIFMD passport. A final decision on an extension, as well as on a possible termination of national private placement regimes will have to be taken by the EU Commission.