---
title: "Alternative Investment Fund Managers… | Altss Glossary"
description: "The Alternative Investment Fund Managers Directive (AIFMD) is the EU law, Directive 2011/61/EU as amended by Directive (EU) 2024/927, that authorises and…"
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Glossary · Legal, regulatory & tax

# Alternative Investment Fund Managers Directive (AIFMD)

Also called: AIFMD II

The Alternative Investment Fund Managers Directive (AIFMD) is the EU law, Directive 2011/61/EU as amended by Directive (EU) 2024/927, that authorises and supervises managers of alternative investment funds and governs how they market those funds in the EU.

Publisher: Altss LLCContent modified 2026-10-02

ALTSS-REG-032

AIFMD regulates the manager rather than the fund product. A legal person whose regular business is managing one or more funds that are not UCITS, whether they hold buyouts, loans, property or hedge fund strategies, is an alternative investment fund manager (AIFM). A fully authorised EU manager must meet rules on capital, risk and liquidity management, valuation, depositaries, remuneration, reporting and investor disclosure; in return it can market its EU funds to professional investors across the EU with a passport. Managers outside the EU market fund by fund under national private placement regimes.

## Jurisdiction and status

AIFMD is an EU directive, so it applies through national transposing laws (for example Luxembourg's AIFM Law of 12 July 2013). It was adopted on 8 June 2011 with a transposition deadline of 22 July 2013.

**AIFMD II**, Directive (EU) 2024/927, was adopted on 13 March 2024. Member states had to adopt and apply its measures by **16 April 2026**; the changes to supervisory reporting (Article 24) apply from 16 April 2027. National transposition status varies; Luxembourg transposed it by a law of 3 March 2026. The applicable rules in each member state are set by its transposing law.

## Scope and key definitions

An alternative investment fund (AIF) is, in short, any collective investment undertaking that is not a UCITS; Article 4(1)(a) sets out the full test. An AIFM is a legal person whose regular business is managing one or more AIFs, meaning at least portfolio management or risk management. A professional investor is an investor that is, or may on request be treated as, a professional client under MiFID II (Article 4(1)(ag)); every other investor is retail.

The directive excludes certain entities, such as holding companies, institutions for occupational retirement provision, supranational institutions, central banks, employee participation schemes and securitisation special purpose entities.

## Full-scope and sub-threshold managers

| Category | Threshold (Article 3(2)) | Regime |
| --- | --- | --- |

| Sub-threshold AIFM | Assets under management, including assets acquired through leverage, not exceeding EUR 100 million; or not exceeding EUR 500 million if unleveraged and with no redemption rights for five years from initial investment | Registration and limited reporting; no passport unless it opts in to full authorisation |

| Full-scope AIFM | Above those thresholds, or opted in | Authorisation and the full directive |

A full-scope AIFM must hold minimum capital; manage conflicts; maintain separate risk management and liquidity management; ensure proper valuation; follow delegation rules; appoint a single depositary for each AIF; publish an annual report; make prescribed disclosures to investors before they invest; report regularly to its regulator (the Annex IV report); apply remuneration rules; and, where its funds acquire control of unlisted EU companies, meet notification and anti-asset-stripping rules.

## Marketing in the EU

- **Passport:** an authorised EU AIFM may market an EU AIF that it manages to professional investors in other member states after notifying its home regulator; the regulator transmits the complete notification file to the host member states within 20 working days, and marketing may start from the date it informs the AIFM of the transmission (Article 32(2)-(4)).

- **National private placement regimes (NPPR):** a non-EU AIFM, or any manager marketing a non-EU AIF, may market only where each member state's national regime allows it, subject to minimum conditions in Articles 36 and 42: transparency and reporting, cooperation arrangements between regulators, and conditions on the third country where the manager or fund is established. Since AIFMD II (applying from 16 April 2026) that country must not be identified as a high-risk third country under Article 9(2) of the EU anti-money-laundering directive (Directive (EU) 2015/849), must have signed an agreement with each member state where the fund is to be marketed (and, for an EU manager under Article 36, its home member state) that fully complies with Article 26 of the Organisation for Economic Co-operation and Development (OECD) Model Tax Convention on exchange of tax information, and must not be on the EU list of non-cooperative jurisdictions for tax purposes. These conditions replaced the original test that the country was not listed by the Financial Action Task Force (FATF) as a non-cooperative country or territory. Member states may impose stricter rules (Article 42(2)), and the Commission reported in 2020 that some had closed market access for third-country entities entirely.

- **Third-country passport:** provided for in Articles 35 and 37 to 41, which apply only from a date set by a Commission delegated act under Article 67(6); the Commission reported in June 2020 that the passport had not been activated.

- **Retail investors:** marketing AIFs to retail investors is left to each member state, except for products with an EU retail framework such as the [ELTIF](https://altss.com/glossary/eltif).

Activities before formal marketing are governed by the rules on pre-marketing. Marketing means an offering or placement at the initiative of, or on behalf of, the AIFM (Article 4(1)(x)), so an investment made genuinely at the investor's own initiative (reverse solicitation) falls outside it.

## United Kingdom

In the UK the regime is set by the Alternative Investment Fund Managers Regulations 2013 (SI 2013/1773), in force as amended at 1 October 2026. They provide for authorisation of full-scope UK AIFMs (Part 2), registration of small, sub-threshold UK AIFMs (Part 3, regulations 9-10), and the national private placement regime for marketing third-country AIFs in the UK (Part 6, regulations 57-59). Firms with both EU and UK activity apply the two regimes in parallel.

## What AIFMD II changes

For loan-originating AIFs, AIFMD II caps leverage at 175% of NAV for open-ended and 300% for closed-ended funds (commitment method; borrowing fully covered by investors' capital commitments is not counted), limits loans to a single borrower that is a financial undertaking, AIF or UCITS to 20% of the fund's capital, and requires the fund to retain 5% of the notional value of each loan it originates and then transfers to third parties, until maturity for loans of up to eight years and for consumer loans and otherwise for at least eight years, subject to listed exceptions (Article 15(4a), (4b) and (4i)). Transitional rules apply (Article 61(6)): loan-originating AIFs constituted before 15 April 2024 are deemed to comply with the single-borrower, leverage and related limits (Article 15(4a) to (4d) and Article 16(2a)) until 16 April 2029, provided that single-borrower exposures or leverage already above the limits are not increased and those below the limits are not raised above them; those that raise no additional capital after 15 April 2024 are deemed to comply without a time limit; and loans originated before 15 April 2024 are outside the retention and related loan rules (Article 15(3)(d) and (4e) to (4i)). It also revises delegation, liquidity management tools for open-ended funds, investor disclosure and supervisory reporting (the Article 24 reporting changes apply from 16 April 2027), and replaces the third-country conditions for national private placement described above.

## How LPs and GPs encounter AIFMD

EU LPs receive pre-investment disclosures, annual reports and depositary oversight under the directive, and often require the manager to be an authorised or registered AIFM. Non-EU GPs raising capital in Europe plan around NPPR filings country by country, the associated Annex IV reporting, and the portfolio-company notification rules. EU managers of private-markets funds commonly use Luxembourg vehicles such as the RAIF and the SCSp.

## Not the same as

- UCITS: UCITS is the EU's harmonised retail fund regime; any EU fund that is not a UCITS is an AIF governed through AIFMD.

- MiFID II: MiFID II regulates investment firms and services and supplies the professional client definition that AIFMD uses.

- [European Long-Term Investment Fund (ELTIF)](https://altss.com/glossary/eltif): ELTIF is an EU product regime for long-term AIFs that adds a retail passport; its manager must be an authorised AIFM.

## Common mistakes

- Saying AIFMD regulates funds directly. It regulates managers and, through them, the funds they manage.

- Assuming AIFMD II applies identically in every member state from 16 April 2026. Transposition varies by state.

- Describing the third-country passport as available to non-EU managers; it depends on a Commission delegated act that, as the Commission reported in 2020, had not been adopted.

- Treating reverse solicitation as a safe harbour for marketing campaigns.

- Assuming a sub-threshold AIFM can use the marketing passport without opting in to full authorisation.

## Edge cases

- Family office vehicles investing the family's own wealth without raising external capital are generally outside the AIF definition.

- Leverage counts toward the EUR 100 million sub-threshold test.

## Questions

### Does AIFMD apply to US private equity managers?

When they market funds to investors in the EU or EEA, yes, through the national private placement regime of each member state, which imposes AIFMD transparency, reporting and portfolio-company rules. The directive's passport for non-EU managers depends on a Commission delegated act under Article 67(6), which the Commission reported in 2020 had not been adopted.

### When does AIFMD II apply?

Member states had to apply it by 16 April 2026, with the supervisory-reporting changes from 16 April 2027. The exact date in each country depends on its transposing law.

## Sources

- [Directive 2011/61/EU on Alternative Investment Fund Managers (AIFMD)](https://eur-lex.europa.eu/eli/dir/2011/61/oj/eng). European Parliament and Council, Official Journal of the EU, L 174, 1.7.2011, Adopted 8 June 2011; transposition by 22 July 2013. Status: In force; amended by Directive (EU) 2024/927 (AIFMD II) (checked 2026-10-01). Directive 2011/61/EU, recitals 7, 88; Arts. 2(3), 3(2)-(4), 4(1)(a), (b), (w), (x), (ag), 9, 13-16, 19-24, 26-30, 31-32, 35-43, 66(1), 67(6) — supports: Definitions; scope and exclusions; family office vehicles not AIFs; Art 3(2) thresholds; manager obligations; marketing definition; passport and NPPR; stricter national NPPR rules; third-country passport conditional on delegated act; adopted 2011-06-08, transposition by 2013-07-22

- [Directive (EU) 2024/927 amending Directives 2011/61/EU and 2009/65/EC (AIFMD II)](https://eur-lex.europa.eu/eli/dir/2024/927/oj/eng). European Parliament and Council, Official Journal of the EU, L series, 26.3.2024, Adopted 13 March 2024; Member States to adopt and apply measures by 16 April 2026 (some reporting provisions later). Status: In force; transposition deadline passed 16 April 2026; national transposition status varies by Member State (checked 2026-10-01). Directive (EU) 2024/927, Art. 1(15) and 1(18) (replacing AIFMD Arts. 36(1)(c)–(d) and 42(1)(c)–(d)); Art. 3(1) — supports: AIFMD II: application from 2026-04-16 and Article 24 reporting changes from 2027-04-16; loan origination 175%/300% leverage, 20% financial-borrower cap, 5% retention; NPPR third-country conditions (EU AML high-risk list, OECD Article 26 tax agreement, EU non-cooperative tax list)

- [Law of 12 July 2013 on alternative investment fund managers (Luxembourg AIFM Law) - CSSF consolidated text](https://www.cssf.lu/wp-content/uploads/L_120713_AIFM_eng.pdf). Grand Duchy of Luxembourg; consolidation by CSSF, CSSF, Consolidated text updated 16 April 2026. Status: In force (as amended) (checked 2026-10-01). Luxembourg AIFM Law, as amended by Law of 2026-03-03 — supports: Example national transposition, including AIFMD II

- [Directive 2014/65/EU on markets in financial instruments (MiFID II), Annex II Professional Clients](https://eur-lex.europa.eu/eli/dir/2014/65/oj/eng). European Parliament and Council, Official Journal of the EU, L 173, 12.6.2014, Adopted 15 May 2014; applied from 3 January 2018 (as extended). Status: In force (amended) (checked 2026-10-01). Annex II — supports: Professional client definition used by AIFMD

- [The Alternative Investment Fund Managers Regulations 2013 (SI 2013/1773)](https://www.legislation.gov.uk/uksi/2013/1773/contents). UK Government (legislation.gov.uk), Revised text; contents page states up to date with changes known to be in force on or before 1 October 2026. Status: in force (checked 2026-10-01). Parts 2, 3 (regs 9-10), Part 6 Ch 3 (regs 57-59) — supports: UK AIFM regime

- [Report from the Commission on the application and scope of Directive 2011/61/EU (AIFMD), COM(2020) 232 final](https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:52020DC0232). European Commission (text via Publications Office, CELEX 52020DC0232), 2020-06-10. Status: published (checked 2026-10-02). COM(2020) 232, section 2.1 — supports: Third-country passport not activated (as at June 2020); some Member States closed NPPR access

## Related terms

2 terms

- [European Long-Term Investment Fund (ELTIF)](https://altss.com/glossary/eltif)

- [Sustainable Finance Disclosure Regulation (SFDR)](https://altss.com/glossary/sfdr)

## Referenced by

10 terms

- [Assets Under Management (AUM)](https://altss.com/glossary/assets-under-management)

- [First Close](https://altss.com/glossary/first-close)

- [Fund Administrator](https://altss.com/glossary/fund-administrator)

- [Fundraising (Private Fund Fundraising)](https://altss.com/glossary/fundraising)

- [Institutional Investor](https://altss.com/glossary/institutional-investors)

- [Most Favored Nation (MFN) Clause](https://altss.com/glossary/most-favored-nation-mfn)

- [Placement Agent](https://altss.com/glossary/placement-agent)

- [Private Credit](https://altss.com/glossary/private-credit)

- [Private Placement Memorandum (PPM)](https://altss.com/glossary/private-placement-memorandum)

- [Side Letter](https://altss.com/glossary/side-letter)

## Concept record

Concept ID

ALTSS-REG-032

Classification

Legal, regulatory & tax

Topics

Legal, regulatory & tax

Jurisdiction

EU; EEA; UK

Version

2.0.0

Last reviewed

2026-10-02

Structured data

[JSON](https://altss.com/reference/concepts/aifmd.json)

Source check

Legal and regulatory statements checked against the cited primary sources on 2026-10-02 ([how](https://altss.com/methodology)). General information, not advice.

## Canonical URL

https://altss.com/glossary/aifmd