AIFMD 2.0 Is Coming: What Fund Managers Need to Know Before April 2026

With three months to do, AIFMD 2.0 is finally approaching implementation. EU Member States must transpose the directive into national law by 16 April 2026, with fund managers expected to be compliant from that date.

While AIFMD 2 does not fundamentally overhaul the existing regime, it introduces targeted but material changes that will affect how AIFMs manage liquidity, originate loans, delegate functions, disclose information, and access EU investors. The impact is particularly significant for credit funds, open-ended structures, and non-EU managers marketing into the EU.

Who Is in Scope?

AIFMD 2 applies to EU-authorised AIFMs and, for a number of key provisions, non-EU AIFMs marketing AIFs in the EU under national private placement regimes.

Several of the most operationally demanding requirements, particularly those relating to liquidity risk management and investor disclosures, apply to non-EU managers as well. This continues the trend of the EU exporting regulatory expectations beyond its borders.

Liquidity Risk Management: A More Prescriptive Framework

One of the most significant changes under AIFMD 2 is the introduction of mandatory liquidity risk management tools for open-ended AIFs. The definition of “open-ended” is deliberately broad and captures any AIF where investors can redeem prior to liquidation or wind-down, even if the fund is not traditionally viewed as open-ended.

Under the new regime, managers of open-ended AIFs must select and implement at least two liquidity management tools (LMTs) from a prescribed list and embed them into fund documentation and operational processes. These tools include, among others:

• Redemption gates

• Notice period extensions

• Swing pricing

• Anti-dilution levies

In addition, all open-ended AIFs must be able to deploy:

• Suspension of subscriptions and redemptions; and

• Side pockets, in genuinely exceptional circumstances

AIFMD 2 also grants regulators enhanced powers to intervene in the use of LMTs, reflecting supervisory concern about liquidity mismatches in stressed market conditions. These rules apply to both EU and non-EU AIFMs, raising open questions about how far third-country managers must align their liquidity frameworks with EU expectations.

Loan Originating Funds: Structural and Leverage Constraints

AIFMD 2 introduces a new regulatory category of “loan originating AIFs”, broadly capturing funds whose primary strategy is to originate loans (commonly referred to as credit or private debt funds).

As a default position, loan originating AIFs must now be closed-ended, unless the AIFM can demonstrate that the fund’s liquidity risk management system is fully compatible with its redemption policy and investment strategy.

In addition, new leverage caps apply:

• 175% for open-ended loan originating AIFs

• 300% for closed-ended loan originating AIFs

Although a regulatory technical standard is expected to clarify how managers can demonstrate liquidity compatibility, its adoption has been deprioritised and is unlikely before October 2027, creating a period of uncertainty for affected funds.

Loan Origination Rules Extend Beyond Credit Funds

Even where an AIF is not classified as a loan originating fund, AIFMD 2 introduces new restrictions on loan origination activity more generally. These include:

• A 5% risk retention requirement for originated loans (subject to limited exceptions)

• A 20% single-borrower concentration limit for certain borrowers

• Prohibitions on lending to the AIFM, its staff, or other connected parties

• Enhanced policy and procedural requirements governing underwriting, monitoring, and risk management

The clear regulatory intent is to prevent originate-to-distribute models that externalise credit risk and to address conflicts of interest in private lending structures.

Enhanced Disclosure and Reporting Obligations

AIFMD 2 significantly expands transparency requirements under Article 23, with new disclosures covering:

• Liquidity risk management arrangements

• Fees and charges

• Loan origination activity and exposures

These disclosure obligations apply to EU and non-EU AIFMs alike, reinforcing the importance of reviewing offering documents and investor reporting well in advance of April 2026.

Enhanced Annex IV regulatory reporting will apply from 16 April 2027, requiring substantially more granular information on:

• Risk profile and leverage

• Delegation arrangements

• Marketing activity

• Internal resourcing and governance

Regulatory technical standards are expected to further specify these reporting requirements.

Marketing Into the EU: Higher Barriers for Non-EU Managers

AIFMD 2 tightens the conditions under which non-EU AIFMs and AIFs can be marketed in the EU. The existing reliance on the FATF blacklist is replaced by the EU’s own AML high-risk third-country list, which is materially broader.

In addition:

• Marketing is prohibited where the AIFM or AIF is established in a jurisdiction on the EU’s non-cooperative tax list; and

• Non-EU jurisdictions must have OECD-compliant tax information exchange agreements in place with each EU Member State where marketing occurs

For some non-EU managers, these changes may significantly restrict or eliminate access to certain EU markets.

Substance and Delegation: Incremental but Important Changes

AIFMD 2 does not dismantle the existing delegation model and explicitly recognises its importance to the asset management industry. However, it does expand the scope of delegation rules and increase supervisory expectations.

Delegation requirements now explicitly cover:

• All Annex I AIFMD functions; and

• MiFID “top-up” services and other ancillary activities

AIFMs must ensure that delegated activities comply with AIFMD standards regardless of the delegate’s location or regulatory status, including where functions are delegated to non-EU entities. This issue is currently the subject of discussion and Q&A at European Securities and Markets Authority level.

There is, however, a helpful clarification that marketing and distribution agreements with MiFID-authorised firms or insurance distributors are not treated as delegation for AIFMD purposes.

Grandfathering: Transitional Relief With Caveats

AIFMD 2 includes complex grandfathering provisions, but several practical themes emerge.

In broad terms:

• AIFs established before 15 April 2024 benefit from delayed application of loan origination leverage and concentration limits until 16 April 2029

• Funds that did not raise additional capital after that date may benefit from indefinite grandfathering

• Loans originated before 15 April 2024 are exempt, on a loan-by-loan basis, from:

  • Risk retention requirements

  • Certain borrower restrictions

  • New procedural obligations

What Should AIFMs Be Doing Now?

With April 2026 approaching, AIFMs should be taking structured preparatory steps, including:

• Scoping which funds are open-ended, loan originating, or engaged in lending

• Assessing eligibility for grandfathering and identifying obligations that apply from day one

• Updating fund documentation, policies, and procedures—particularly around liquidity and lending

• Refreshing Article 23 disclosures

• Reviewing delegation and oversight arrangements, including non-EU delegates

• Assessing EU substance and governance

• Enhancing data and reporting systems ahead of April 2027

Compliance Angle Can Help

Regulators will expect firms to clearly identify which funds are in scope, assess the impact on liquidity management, loan origination, delegation, disclosures and marketing, and implement appropriate governance and controls well ahead of the April 2026 deadline.

Compliance Angle supports EU and non-EU AIFMs in scoping, designing and implementing AIFMD 2-ready compliance frameworks. We provide practical, Board-ready support, including gap analyses, policy and procedure updates, Article 23 disclosure reviews, delegation assessments, and implementation roadmaps tailored to fund structures and grandfathering positions. Our approach is pragmatic and proportionate, focused on regulatory expectations while remaining commercially realistic.

Contact Compliance Angle at info@complianceangle.co.uk or call +44 7427 792594 to schedule a free consultation to discuss how we can support your firm in preparing for AIFMD 2.