Alternative Investment Fund Manager (AIFM)
An Alternative Investment Fund Manager (more often referred to as AIFM) is an investment manager that is bound by the provisions of the Alternative Investment Fund Managers Directive. The directive covers managers of alternative investment schemes designed for professional investors, in the EU. Alternative investments funds include hedge funds, real estate funds, private equity funds and other types of institutional funds which are not otherwise regulated, by the UCITS directive (the main EU framework which covers collective investment schemes).
Notwithstanding the AIFMD being an EU directive, management and marketing regimes regulating alternative investment funds continue to exist in some non-EU territories through other regulatory requirements. In post-Brexit UK for example, a domestic regime has been introduced, incorporating a ‘UK AIFMD regime’ (largely maintaining the rules set out in the AIFMD) into the UK’s own legislative framework.
Watch This Space: With each amendment to the EU AIFMD, and the possibility of a divergent approach from non-EU countries over time, the more likely there may be a schism between EU and non-EU countries as to the regulatory approach towards AIFMs. It is critical that your insurance broker is appraised of these issues and manages your risk appropriately.