Non-EU firms will struggle with ‘patchwork quilt’ of AIFMD rules

EUAlternative investment funds based outside the EU may be deterred from operating in Europe by a 'patchwork quilt' of rules originating from the Alternative Investment Fund Managers Directive (AIFMD).

Although 17 countries are expected to allow non-EU alternative funds to sell to professional investors by private placement, the countries are expected to employ different rules, says Sturgeon, a regulatory consultancy.

“The result is a patchwork of national treatments of the inward marketing of alternative investment funds,” says the company.

Many funds, for instance Cayman Islands-based hedge funds, may simply not bother to market their products in Europe at all, says Sturgeon, adding that there is a gap in the market for a service to aid non-EU alternative fund managers to comply with the different private placement regimes.

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