On its face, the AIFMD restricts its scope to the regulation of investment managers rather than underlying funds being managed. However it is clear these regulations will have a knock on effect in shaping and influencing the forms of the investment funds under management.
For these purposes an alternative investment fund (AIF) falls into the Directive, in summary, where it is a collective investment undertaking which raises capital from a number of investors, with a view to investing it in accordance with a defined investment policy for the benefit for the investors. It is clear that this definition will capture both open-ended and closed ended funds. Managers of these funds who are active in the European Economic Area (EEA), which includes all EU member states as well as Iceland, Norway and Liechtenstein, will be caught. Specifically excluded are managers of funds regulated under the UCITS framework, holding companies as well as managers of family offices. Some funds that wind down operations and limit the solicitation of new investors prior to commencement of the Directive will also fall out of scope.
At its heart the Directive will introduce a passport mechanism so that managers of AIFs can offer services across the EU. However to qualify for the passport a shopping list of requirements will need to be met. Managers that do not qualify for the passport will be restricted from offering their services, unless one of the exemptions in the AIFMD applies.