Directive (EU) 2024/927, widely known as AIFMD II, is set to redefine the European alternative investment landscape. Building on AIFMD I (2011), it introduces fundamental changes with implementation deadlines in 2026, 2027, and a mandated review in 2029.
By 2030, the directive will reshape how alternative investment funds (hereinafter referred to as ‘AIFs’) are structured, managed, and supervised, moving the EU toward a more transparent, governed, and resilient fund ecosystem.
Below are the fundamental changes to keep an eye on:
- Delegation and the End of Minimal-Substance Models
AIFMD II tightens the rules on delegation by requiring:
- Annual reporting of all delegation and sub-delegation chains,
- Proof of adequate resources, expertise, and “substance,”
- Enhanced European Securities and Markets Authority (hereinafter referred to as ‘ESMA’) oversight and peer reviews of delegation-heavy models.
By 2030, these measures are likely to lead to:
- More robust AIFM core teamslocated within the EU,
- Higher demand for EU-based risk functions,
- Reduced reliance on “letter-box” structures,
- Stronger regulatory convergence on delegation to third countries (especially the UK, US, and Cayman).
Fund structuring will therefore increasingly integrate demonstrable governance depth and supervisory-ready operational substance.
- Liquidity Risk Management Becomes a Structuring Pillar
The introduction of a mandatory Liquidity Management Tools (hereinafter referred to as ‘LMTs’) framework for open-ended AIFs is one of AIFMD II’s most transformational elements.
AIFMD II changes include:
- Mandatory use of at least two ESMA-approved LMTs for open-ended funds,
- Placement of procedures for activating or deactivating these tools which should be clearly documented,
- Compliance with the ability of supervisors to require the use of specific tools during periods of stress.
What this means by 2030:
- Funds investing in less liquid assets will likely adopt semi-liquid or hybrid structures, blending investor access with stability.
- Mechanisms such as swing pricing, redemption gates, and anti-dilution features will become standard, not optional.
- Supervisory expectations will be harmonised across EU member states, making liquidity management more predictable and consistent.
Open-ended funds, especially those investing in less liquid assets, will be structured with built-in liquidity flexibility from inception.
- A New Era for Private Credit Funds
AIFMD II introduces the EU’s first cohesive regime for loan-originating AIFs, including:
- 5% loan retention,
- Strict leverage caps (especially strict for open-ended funds),
- Concentration limits,
- Prohibition on originate-to-distribute models,
- Mandatory credit policies and monitoring frameworks.
Expected outcomes by 2030:
- Widespread adoption of closed-ended fund structures for private credit,
- More conservative leverage models,
- Deep integration of risk and credit oversight into fund governance,
- Reduction of aggressive, distribution-led lending strategies.
Through this regime, private debt is now fully institutionalised within the EU regulatory architecture, promoting stability and investor protection.
- Cost Transparency Will Reshape Value Propositions
New rules on fee and cost disclosures require AIFMs to provide detailed reporting on:
- All fees and charges,
- Transaction costs,
- Performance and distribution fees,
- “Undue costs” justification processes.
By 2030, these obligations will increase:
- Pressure toward fee standardisation,
- Investor demand for transparent pricing models,
- Internal cost-governance frameworks built directly into fund documentation.
The overall effect is a shift toward investor-first pricing discipline.
- A Unified Reporting Infrastructure Will Redefine Operations
AIFMD II mandates a complete redesign of Annex IV reporting, applicable from 2027, including:
- Liquidity data,
- Loan origination data,
- Delegation information,
- Costs and leverage details,
- Harmonised XML templates across the EU.
By 2030, funds will increasingly be built around:
- Integrated reg-tech solutions,
- Automated data pipelines,
- Standardised EU-wide reporting structures.
This shift will reduce fragmentation and enable more consistent supervisory oversight.
The EU Fund Model of 2030
By the end of the decade, EU fund structuring will be characterised by:
- Substance over form: core teams, risk functions, and governance embedded in EU operations
- Transparency and investor focus: clear fees, costs, and decision-making processes
- Data-driven reporting: automated, standardised, and regulator-friendly
- Liquidity and leverage discipline: baked into fund design
- Private credit governance: harmonised and strictly supervised
AIFMD II does not simply amend the existing directive, it sets in motion a Regulatory Evolution that will continue well beyond 2030.
By Stefania G. Christofidou
Compliance & Advisory Consultant