AIFMD 2.0: Strengthening Europe’s Investment Framework for Managers, Asset Owners and Investors
Following its EU‑level application in April, the Central Bank of Ireland has now transposed AIFMD 2.0, with the enabling Statutory Instruments becoming effective from 1st May, marking a key moment for Irish‑authorised AIFMs and UCITS managers.
Rather than reinventing the regimes, the AIFMD 2.0 enhances the regulatory requirements with respect to liquidity risk, delegation and transparency for both UCITS and AIFs. In addition, it amends the AIFM Directive by introducing a harmonised loan origination regime for AIFs. For asset managers, fund boards and investors, the result is a more resilient, comparable and investor‑focused regulatory environment.
Clearer Operating Models for Asset Managers
Liquidity Management Tools
One of the most significant changes is the introduction of a range of prescribed liquidity management tools (LMTs). Managers of open‑ended AIFs and UCITS must now identify, document and disclose at least two LMTs, alongside clear governance triggers and escalation procedures. There is a derogation for UCITS and AIFs authorised as money market funds which are only required to select one LMT. While this will increase the work at the time of fund establishment, it will provide a clear framework which will be transparent to investors for managing liquidity across market conditions.
In practice, many managers are using this as an opportunity to align LMTs across product ranges. Through its management company, risk and regulatory advisory services, Waystone supports clients by designing LMT frameworks, updating risk management policies and ensuring prospectus disclosures are aligned with regulatory expectations and distribution practices across jurisdictions.
Delegation
AIFMD 2.0 requires enhanced disclosure of delegation arrangements, including the scope of delegated activities, the location of delegates, and the ongoing oversight performed by the AIFM. This reinforces the principle that delegation does not dilute responsibility. The UCITS directive has been amended to align the regulatory requirements for delegation with those under AIFMD which benefit UCITS investors and will add to the strength of the UCITS brand. It should also reduce complexity for those asset managers that manage both UCITS and AIFs. Waystone has structured delegate due diligence programmes, substance assessments, ongoing oversight reporting and board‑level governance support.
Loan Origination: A Level European Playing Field
The loan origination rules are one of the most significant amendments introduced under AIFMD 2.0. The Directive introduces harmonised requirements for loan‑originating AIFs across the EU, covering diversification, leverage, liquidity alignment and risk retention. The requirements introduced under AIFMD 2.0 will replace the existing Irish loan origination rules described in the AIF Rulebook. AIFMD 2.0 removes long‑standing disparities between national regimes and supports the growth of private credit strategies within a consistent European framework, a progressive development for asset managers operating across multiple locations
Waystone supports managers by identifying in‑scope funds, drafting loan origination policies, supporting regulatory filings and embedding loan‑specific requirements into risk management, valuation and reporting frameworks—particularly for managers scaling private credit platforms across multiple EU domiciles.
Enhanced Protection for Investors
AIFMD 2.0 enhances transparency and comparability across fund structures for investors. More detailed disclosures on fees, expenses, liquidity arrangements and delegation allow investors to better assess structural risk alongside performance.
Investor protection is a core objective of AIFMD 2.0. Mandatory LMT disclosures, clearer redemption mechanics and enhanced expense transparency improve investor understanding of how funds operate across market cycles.
AIFMD 2.0 underscores Waystone’s location agnostic approach in providing consistent independent governance, reporting and oversight solutions to its clients.
Turning Regulation into Strategic Advantage
As AIFMD 2.0 takes effect, firms that embed the Directive into governance, risk and operating models are best positioned to scale and distribute effectively. Across structuring, management company services, risk and liquidity management, delegation oversight, regulatory reporting and distribution support, Waystone works with asset managers and fund boards to implement the changes introduced by AIFMD 2.0 in a practical, proportionate and future‑focused way.
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