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AIFMD is the pet name for the EU’s Alternative Investment Fund Management Directive

It came into force on 22 July 2013 and regulates:

• EU AIFMs: EU fund managers that manage alternative investment funds (essentially hedge funds and private equity funds) (“AIFs”) (wherever they are based);
• Non-EU AIFMs: Fund managers (wherever they are based) who
  • manage AIFs established in the EU (“EU AIFs”); and
  • market any AIF (including a “Non-EU AIF”) into the EU.

Hedge funds and private equity funds and those managing them were not previously subject to the as much regulation as mutual funds (including UCITS) or pension funds, and some people felt this lack of oversight contributed to the severity of the global financial crisis. So, enter AIFMD to redress that gap.