Alternative Investment Funds

Alternative Investment Funds

Non-UCITS funds were authorised prior to 2013. Such funds now exist only on a transitional basis under the AIFM directive. Older notes and criteria apply. They do not qualify for passporting, other than in compliance with domestic law.

Authorised Investment Funds are funds raised from a number of investors to be invested in accordance with the defined investment policy. As with other funds they may be established under a number of structures.

There are two broad categories of AIFs. A retail investor AIF is authorised and may be marketed to retail investors. A qualifying investor AIF may be marketed to qualifying investors only.

Retail AIFs are subject to less investment and eligible asset restrictions than  UCITS, but more restrictive than the qualified investor AIFs. Retail investment AIFs do not have the right to market across the EU under the AIFMD marketing passport. They may be approved on one by one basis.

Retail investor AIFs must appoint an authorised AIF manager. Non-EU regulated managers may not manage a retail investment AIF

Qualifying investor AIFs are not subject to many investment and borrowing restrictions. They are subject to an expedited approval process.

Rulebook and Guidance

The Central Bank publishes the AIF rulebook from time to time. It deals with both retail investor AIF and qualifying investor AIFs. It covers AIF management companies, fund administrators, AIF managers, and AIF depositories. The latest edition of the rulebook is March 2018.

The Central Bank has issued guidance on a number of topics for AIFs including

  • authorisation applications
  • management company relationship with Central Bank
  • depositories
  • the amalgamation of retail and qualifying investor AIF with other funds
  • asset valuation
  • closed-ended and open-ended AIF’s with limited liquidity
  • director time commitment
  • disapplication of legislation
  • efficient portfolio management by retail investor AIFs
  • investing in unregulated investment funds
  • inward marketing of AIF to retail investors
  • permitted marketing of retail
  • AIF professional investor funds
  • grandfathering arrangements
  • publication of annual and half-yearly reports for funds
  • redemption frequency
  • funds which invest more than half their assets in another investment fund
  • risk spreading
  • short-term money market funds for retail and qualifying investor funds valuation issues
  • subscriptions
  • subsidiaries
  • fund authorisation process
  • share classes
  • hedging
  • cash accounts guidance

There is a question-and-answer guide published regularly.


An application for a retail investor AIF requires

  • the completed application forms
  • draft fund documents including prospectus supplement et cetera
  • draft of letters of appointment

The forms of application are published and include particulars as to the prospectus

  • constitution/trustees/memorandum and articles
  • depository agreement
  • management agreement
  • administration transfer agent agreement
  • investment management agreement
  • investment through subsidiaries
  • distribution payment agent representative agreement
  • AIF manager agreement
  • risk management process
  • funds investing in other funds
  • funds of unregulated funds
  • variations for money market AIF
  • variations for guaranteed AIF

In the case of a qualifying investor AIF, there is expedited approval provided the parties involved are approved in advance and meet the necessary criteria in the AIF rulebook and appropriate confirmation is received in relation to the contents of the documents.

The application must specify the legislation under which authorisation is required. The application must be made by the AIF manager together with the investment company or management company or general partner as appropriate. The fitness and probity requirements of directors and general partners et cetera must be approved in advance. There is an online questionnaire