The regulation defines “alternative” investment funds as those that are not already subject to the UCITS Directive. These include hedge funds, private equity funds, real estate funds and all investment funds for institutional investors. The Directive also defines new requirements for companies that act as depositories for alternative investment funds.
The scope of the AIFMD is broad; it applies to management, administration and marketing departments of alternative investment funds. The Directive requires the stock of all portfolios to be reported in detail. The stock, key risk figures and other fund details must also be disclosed for each individual alternative investment fund.
The reports must be submitted to the national supervisory authority of the country in which the fund is registered on an annual, biannual or quarterly basis. Since almost every regulatory authority uses its own platform for electronic data transmission, fund management can be subject to very high additional costs.
Asset managers and management companies in the UK are required to send their AIFMD reports to every country in which their funds are sold. Because of Brexit, European regulators no longer carry out this task for them.