What Is the Difference Between Marketing and Reverse Solicitation Under the AIFMD?

Since the Alternative Investment Fund Managers Directive (AIFMD) took effect, a non-E.U. fund manager that wishes to market funds into the E.U. is faced with complying with the individual – and disparate – private placement regimes of the E.U. member states.  See “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,” Hedge Fund Law Report, Vol. 7, No. 28 (Jul. 24, 2014).  Alternatively, the manager may wait passively for E.U. investors to seek out the manager, an unpredictable and fraught process known as “reverse solicitation.”  A recent program sponsored by CounselWorks provided guidance on when a manager is “marketing” in the E.U. so as to trigger compliance with the AIFMD, the steps that such a manager must take to comply with local private placement requirements, and how reverse solicitation works in various E.U. states.  See also “Application of the AIFMD to Non-EU Alternative Investment Fund Managers (Part Two of Two),” Hedge Fund Law Report, Vol. 6, No. 24 (Jun. 13, 2013); and Part One of Two.

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