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08 November 2010

EP Background note on the alternative investment fund managers directive


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This note answers some basic questions about what is to be regulated and why. It also also compares the EU institutions' starting positions, and shows the final outcomes on the most controversial issues.


What are alternative investment funds?
Put simply, "alternative investment funds" (AIF) cover a wide range of funds, none of which are covered by the Directive on Undertakings for Collective Investment in Transferable Securities (UCITS). It is estimated that in 2009 AIF managers were responsible for over €1,000 billion in assets.

The best-known AIFs are hedge funds and private equity funds, but others include real estate funds, commodity funds, industrial funds and infrastructure funds.
Most AIFs are not schemes sold directly to small investors. Instead, investors in these funds tend to be institutions such as pension funds, or very wealthy individuals or families. However, their impact on the real economy and the man in the street may still be very tangible as is shown by the example of pension funds. 
 
 



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