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AIFMD II
Navigating the key changes for alternative investment funds
Significant changes to AIFMD (under AIFMD II) take effect from 16 April 2026, subject to national implementation across EU Member States.
EU AIFMs now need to ensure that their operational arrangements and each of their AIFs comply with the new rules, including the loan origination regime and changes to the liquidity risk management requirements (as applicable), subject to the availability of grandfathering relief. This hub brings together our guidance on the regime, including the key rules, FAQs and practical steps for compliance.
Webinar: Regulatory outlook for private capital managers
In this webinar, Partner Michael Sholem joins Rachel Richardson, Head of ESG, and Rhiannon Kinghall Were, Head of Tax Policy, to discuss the increasing regulatory scrutiny affecting private capital managers throughout 2026 – including AIFMD II and the new regime for loan origination.
View event page for the on-demand recording
FAQs
The rules comprising the loan origination regime have raised a series of frequently asked questions, examples of which are below. In lieu of regulatory guidance on these points, Macfarlanes has formed a view on each of these points in discussion with local counsel.
Definitions of a LOF and loan origination
- When and how often should the “at least 50% of NAV” test in limb (ii) of the LOF definition be calculated? On what data should the calculation be determined and how do fluctuations in asset values impact this test? Is there any leeway on this test (e.g. during ramp-up / ramp-down)?
- How should the loan origination regime (including the LOF definition) apply to a feeder fund?
- If an AIF acquires a loan on the secondary market (i.e. the loan is not originated by the AIF), but subsequently agrees to refinance/restructure that loan as creditor, would the loan be treated as “converted” from a non-originated loan to an originated loan?
Leverage limit
- Do underlying vehicles of an AIF that are leveraged (e.g. a leveraged SPV or a leveraged master fund) count towards the AIF’s leverage limit?
- How does the transitional provision regarding the leverage limit which is afforded to LOFs established before 15 April 2024 and which continued to raise capital after that date (which applies until 16 April 2029) apply in practice?
Attribution of loan proceeds
- Does this rule mean that AIFs cannot structure co-investments/syndications as sub-participations?
Originate to distribute
- Does the prohibition on having an “originate to distribute” strategy apply to an AIF that originates a loan and then syndicates a portion to other lenders/creditors?
Risk retention/shareholder loans
- Would a loan continue to meet the definition of a “shareholder loan” and comply with the 5% risk retention rule if the loan was repaid or refinanced and the equity subsequently sold?
- Would a loan to an entity that is the borrower of a loan originated before 15 April 2024 be subject to the risk retention rule?
Scoping of AIFs
- How should it be determined whether an AIF is open-ended? For example, should an AIF with terms such as a tender offer or run-off redemption mechanism be treated as open-ended?
- Are EU AIFs that are in the process of being liquidated as at 16 April 2026 in scope of the rules comprising the loan origination regime?
