Not Out of the Net: M&A Pitfalls under the AIFMD for Non-EU Acquisitions Made by Non-EU Funds
- The EU Alternative Investment Fund Managers Directive comes into force on July 22, 2013 and will have implications for some M&A deals that have only peripheral EU contacts.
- Under the AIFMD, a non-EU fund making an investment outside the EU may nonetheless be subject to the reporting and asset-stripping rules of the AIFMD if (i) the target has EU subsidiaries (even if the parent is outside of the EU) and (ii) the non-EU fund has become subject to the AIFMD requirements, for example by marketing its interests in the EU.
- If a non-EU investment involves the formation of any EU vehicle, such as a co-investment partnership, club-deal entity, bid-co or top-co, non-EU managers will need to consider carefully whether the vehicle itself might be an AIF, making the manager of that vehicle potentially subject to the AIFMD.
- Because AIFMD is being implemented at a national level, the deal considerations mentioned above may vary and may become effective at different times, depending on the country implicated by the deal and its structure. We will be monitoring implementation and providing further client alerts.