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By Dr. Sebastiaan Hooghiemstra, senior associate in the investment management practice of Loyens Loeff in Luxembourg
Practitioners spend considerable time analyzing how redemptions are paid. They spend far less time analyzing whether a redemption right came into existence in the first place. That asymmetry is the source of most classification errors in semi-liquid fund structures and, under AIFMD 2, it is increasingly costly.
A recent prior contribution in this magazine introduced a three-question framework for distinguishing open-ended from closed-ended AIFs in evergreen structures, anchored in the distinction between a redemption right and a redemption request.
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