Central Bank of Ireland Enhancements to Loan Originating Fund Rules
Ireland was the first European Union member state to introduce a specific regulatory framework for loan originating investment funds. Since first publishing its requirements in 2014 for loan origination qualifying investor alternative investment funds (“L-QIAIF”), the Central Bank of Ireland has taken a pragmatic approach with regards to the permitted activities and instruments that a L-QIAIF can undertake.
Background to the Changes to the Loan Originating Fund Rules
On 7 February 2018, the Central Bank of Ireland (CBI) announced its intention to further amend the requirements for L-QIAIFs permitting them to cover a broader universe of credit-focused strategies. To read more about the changes click here.
Waystone’s Response to Enhanced L-QIAIF Regulations
Derek Delaney, Global Chief Operating Officer at Waystone, formerly DMS commented, “The Irish regulatory framework for L-QIAIFs provides an important opportunity for asset managers to engage in new investment strategies within a transparent regulatory framework. L- QIAIFs benefit from the fast-track authorisation procedure available to all other types of QIAIFs, meaning they are capable of being regulated within 24 hours of a single filing of documentation with the Central Bank.
As a market leader in the establishment of loan origination, private debt/lending and credit related strategies, DMS fully supports and welcomes this important development. Asset managers, investors and consultants alike are increasingly allocating to these strategies when seeking uncorrelated returns to more traditional asset classes”.
The Foley Lardner Response to Enhanced L-QIAIF Regulations
Stuart Fross, Partner at Foley & Lardner LLP commented, “The L-QIAIF is an innovative and flexible product which allows asset managers flexibility combined with the ability to design the structure which is essential when considering the differing characteristics of loan and credit strategies. The strong legal and regulatory environment in Ireland and the ability of the L-QIAIF to avail of the pan-European AIFM marketing passport will make it an extremely useful vehicle for fund sponsors”. He noted that “the L-QIAIF is the fastest path to authorisation in Europe. For fund sponsors in need of an authorised product, particularly in direct lending, the L-QIAIF is state-of-the-art. Together with Ireland’s tax treaty network, the L-QIAF should be given close consideration by any manager originating loans in the United States.”
As key partners, DMS and Foley & Lardner LLP are able to leverage off the global support of each others firms, means they are best placed to support you and your business with these new changes to the loan origination regimes.
About Waystone & Foley Lardner
Waystone is the worldwide leader in fund governance + risk + compliance serving more than $1Tn in fund assets and 60% of the top investment managers globally. Waystone excels in delivering high-quality professional European fund management services across a diverse range of leading global institutions and emerging fund managers.
Foley & Lardner LLP looks beyond the law to focus on the constantly evolving demands facing our clients and their industries. With nearly 900 lawyers in 19 offices across the United States, Europe and Asia, Foley approaches client service by first understanding our clients’ priorities, objectives and challenges. We work hard to understand our clients’ issues and forge long-term relationships with them to help achieve successful outcomes and solve their legal issues through practical business advice and cutting-edge legal insight. Our clients view us as trusted business advisors because we understand that great legal service is only valuable if it is relevant, practical and beneficial to their businesses.
Should you have any questions regarding European fund management solutions and how Waystone and Foley & Lardner LLP may assist you, or you require any further information, please get in touch.
