Navigating the Patchwork of National Private Placement Regimes: A Roadmap for Marketing in Europe by Non-EU Hedge Fund Managers That Are Not Authorized Under the AIFMD

The European Union’s (EU) Alternative Investment Fund Managers Directive (AIFMD) established a comprehensive regime to regulate investment funds that are not organized under the Undertakings for Collective Investment in Transferable Securities Directive and that are based in or marketed into the EU.  See “Application of the AIFMD to Non-EU Alternative Investment Fund Managers (Part One of Two),” Hedge Fund Law Report, Vol. 6, No. 21 (May 23, 2013).  July 22, 2014 was a critical compliance deadline under the AIFMD.  As of that date, in order to market funds in the EU, EU fund managers must be fully authorized under the AIFMD.  Non-EU managers that are ineligible for, or that do not wish to seek, full AIFMD authorization must rely on the private placement regimes of each EU state in which the manager will market; alternatively, they might consider relying on “reverse solicitation” or joining an AIFMD-authorized platform.  See “Four Approaches to Fund Marketing and Distribution Under the AIFMD,” Hedge Fund Law Report, Vol. 7, No. 21 (Jun. 2, 2014).  A recent program sponsored by Covington & Burling LLP and Augentius provided a timely recap of the requirements and challenges facing non-EU fund managers that wish to market into the EU in reliance on the private placement regimes.

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