ALTERNATIVE INVESTMENT FUND MANAGERS DIRECTIVE 2011/61/EU (THE "AIFMD").
A new law governing the licencing and operation of the Alternative Investment Fund Managers below the thresholds set by the Alternative Investment Fund Managers Directive 2011/61/EU (the "AIFMD") was enacted on the 3rd of July 2020. The new law governs the establishment, the authorization procedure, the legal requirements and the operation of the so-called Mini Managers.
The Mini Managers are entitled to manage Alternative Investment Funds ("AIFs") whose assets under management do not exceed the amount of Euro 100 million, including assets acquired through the use of leverage or the amount of Euro 500 million without the use of leverage, with no redemption rights exercisable during a period of 5 years from the date of the initial investment.
The following types of AIFs may be managed by a Mini Manager:
- AIFs of the Republic;
- AIFs of another Member State of the European Union or of a third country to the extent permitted by the competent authority of such country;
- Alternative Investment Funds with Limited Number of Persons;
- Registered Alternative Investment Funds in the form of a limited partnership.
The key requirements applicable to the Mini Managers as per the new law are:
- Initial Capital: €50.000
- Board of Directors: at least 4 persons, with at least 2 persons performing executive duties.
- Activities: Portfolio Management, Administration, Marketing and Activities related to the assets of the AIFs.
The introduction of the legislation for Mini Managers enriches the fully advanced and modernised legislative framework for alternative investment funds in Cyprus creating new opportunities and motives for fund managers to act in a lighter regulatory regime.
Originally published 13 August, 2020
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