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By Frank VAN KUIJK, Agata SZYMONIAK and Benjamin HITZGES, Loyens Loeff
AIFMD 2 tightens the rules for open-ended funds
European Alternative Investment Fund Managers (EU AIFMs) must classify each private fund under management (each an alternative investment fund or AIF) as either closed-ended or open-ended. This distinction is key because EU AIFMs managing open-ended AIFs must be able to demonstrate that investors’ withdrawal rights are aligned with the liquidity profile of the underlying portfolio. This analysis is particularly relevant for funds investing in illiquid assets, where overly flexible redemption terms may force sudden asset disposals at discounted prices, ultimately harming remaining investors...
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