With one month to go, fund managers should be ramping up their preparations for complying with the legislative changes to European Union (“EU”) Alternative Investment Fund Managers Directive (“AIFMD”), commonly referred to as “AIFMD 2.0”, which will come into effect in EU member countries on 16 April 2026.
The majority of the changes will apply to EU authorised alternative investment fund managers (“EU AIFMs”), but there are elements of AIFMD 2.0 that will also apply to non‑EU AIFMs that market their funds in the EU under the National Private Placement Regimes (“NPPRs”).
For fund managers that have only fundraised in the EU in reliance of reverse solicitation there will be no changes arising under AIFMD 2.0. Furthermore, the UK is not implementing under AIFMD 2.0 so there will no change for fund managers that have marketed in the UK under UK NPPR.
Preparation
Funds that are currently within the scope of AIFMD should be assessing the changes that may need to be made to comply with the new requirements. If a fund sponsor has engaged a third party EU AIFM to manage one or more of its funds then it should check with its third-party AIFM if any changes need to be made to the current fund arrangements, policies and agreements.
Some of the key changes arising under the AIFMD 2.0 that are relevant for EU AIFMs, and also to non-EU AIFMs (such US fund managers) that market their funds in the EU via the NPPRs, are set out below:
- Changes to AIFMD Investor Pre-Contractual Disclosures (for funds that will be fundraising on or after 16 April this year): AIFMD 2.0 amends Article 23 of the AIFMD, which is what the AIFMD disclosures in the PPM / AIFMD supplement are based on. This includes the following additional disclosure item: “a list of fees, charges and expenses that are borne by the AIFM in connection with the operation of the AIF and that are to be directly or indirectly allocated to the AIF”. AIFMD disclosures should be updated to cover this additional disclosure.
- Changes to Annex IV Reporting: AIFMD 2.0 amends certain elements of the Annex IV reporting process, but the new secondary legislation on reporting (which will reshape the reporting templates) is due be published by 16 April 2027. Firms will be expected to report against the new template following its publication. Ahead of this, firms should be aware of the additional information requirements arising under AIFMD 2.0 so they are able to comply with them in due course.
If firms engage a service provider to prepare their Annex IV reports, we recommend discussing any expected changes required to Annex IV reporting processes as part of the general dialogue with these service providers.
- Additional Data to be Reported to Investors: Fund managers should start preparing for certain additional information items to be reported to investors on an annual basis. These additional items include information on all fees, charges and expenses that were directly or indirectly borne by investors as well as the use of subsidiaries and SPVs in relation to the AIF’s investments. These disclosures should be provided at least on an annual basis in the Article 22 AIFMD Annual Reports.
For AIFs managed by EU AIFM the following additional requirements will apply:
- Delegation and substance: AIFMD 2.0 retains the delegation model but expands the information EU AIFMs must provide to regulators at authorisation stage and on an ongoing basis. This includes more granular reporting on delegation and sub-delegation arrangements and the AIFM’s resources and oversight framework. We recommend reviewing delegation arrangements (including oversight, due diligence and contractual terms) and confirming that the AIFM continues to operate with appropriate substance and control.
- Loan origination: AIFMD 2.0 introduces a specific regime for loan-originating AIFs and certain loan origination activity, this will apply, for example, to lending activity carried out by a fund. For funds that carry out such activities, the new AIFMD 2.0 requirements should be assessed and appropriate changes (e.g. to the investment policies and investor disclosures) should be made in order to comply with the new requirements.
- Liquidity management tools (relevant only to open-ended AIFs): for open-ended AIFs managed by EU AIFMs, AIFMD 2.0 introduces a harmonised framework for liquidity management tools. In practice, this will require selecting at least two appropriate tools from the prescribed list, incorporating them in the constitutional documents of the fund, maintaining a written policy , and updating investor disclosure on the tools and their use. There are also notification requirements to the competent authority when certain tools are activated or deactivated. For firms that manage or sponsor open-ended AIFs, the new AIFMD 2.0 requirements should be assessed and appropriate changes made in order to comply with the new requirements.
