What is the Alternative Investment Fund Managers (AIFM) Directive 2011?

The Alternative Investment Fund Managers (AIFM) Directive 2011 is a European Union directive providing for the regulation of hedge funds, private equity companies, property investment funds and other non-mainstream investment vehicles. It requires such companies to seek authorisation, the first time such a requirement had been imposed at EU level.

Where have you heard about the Alternative Investment Fund Managers (AIFM) Directive 2011?

As an investor, you may be aware of the Alternative Investment Fund Managers Directive 2011, especially if you are invested in one of the 'alternative' vehicles that it covers. Financial media refer to the directive, as do some investment guides.

What you need to know about the Alternative Investment Fund Managers (AIFM) Directive 2011.

The Alternative Investment Fund Managers Directive 2011 was one of a number of responses at EU level to the 2008 financial crisis and its aftermath. It sought to bring what had been treated as essentially private investment vehicles more within the sort of regulatory scope already applied to banks and insurers. The directive declares: 'Recent difficulties in financial markets have underlined that many AIFM strategies are vulnerable to some or several important risks in relation to investors, other market participants and markets.' It adds that it will impose 'a harmonised and stringent regulatory and supervisory framework' for AIFM activity. Defenders of hedge funds and private-equity companies point out that the financial crisis originated within mainstream banks.