Contributed by Martin Cornish, M.W. Cornish & Co.
What alternatives are available to non-EU Investment Managers (AIFMs) wishing to raise capital from European investors for their non-EU Funds? This presentation outlines the various routes to market from so-called ‘reverse solicitation’ to ‘passporting’ under the EU Alternative Investment Fund Manager Directive (AIFMD).
AIFMD provides a framework for harmonising the management and marketing of Alternative Investment Funds (“AIFs”) (i.e. all “collective investment undertakings” other than EU UCITS funds) in the European Union (“EU”).
Different rules apply to:
- EU managers of EU AIFs and non-EU AIFs;
- Non-EU managers managing and marketing EU AIFs to EU investors; and
- Non-EU managers marketing non-EU AIFs to EU investors.
Broadly speaking, the options for non-EU AIFMs raising capital from EU investors are:
- Rely on “Reverse Solicitation”;
- Register country by country under the national private placement rules (NPPRs);
or - Set up an EU AIF and an EU manager in order to obtain the right to “passport”
into all 28 EU jurisdictions - Engage a 3rd party AIF and/or AIFM ‘platform’ in order to obtain the right to
“passport” in all 28 EU jurisdictions.
We have created a Q&A Guide for AIFMD Marketing as well as a summary of Reverse Solicitation under AIFMD – Please click here to gain further insights.
Martin Cornish, a leading European funds and regulatory expert, led a discussion covering the topic of “Fund Raising in Europe” during Hedge Connection’s May 2018 Table Talks NYC. As principal of M.W. Cornish & Co., which provides legal and other services, Martin Cornish is an acknowledged expert in the financial services field and has acted for securities, commodities, derivatives and foreign exchange broker/dealers, banks, investment banks, investment managers and insurance companies for over 30 years.
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