Raising European capital: do the benefits of a marketing passport outweigh the cost?
23.07.2024 – Contributors
While an average distribution process may last six to 18 months, for sponsors who elect to complete European distribution using a marketing passport, the costs of compliance with the Alternative Investment Fund Managers Directive (AIFMD) over the ten plus two year lifecycle of their fund could add €3m or more in administrative costs. There’s clearly a place for a marketing passport but for non-EU sponsors looking to market non-EU funds, this should not be considered the default option.
In this article we will take a look at how non-EU funds can be effectively distributed in Europe, the impact of this from a legal/regulatory perspective and the cost differences between electing to use a passported Luxembourg based fund solution and marketing a non-EU fund under Article 42 of AIFMD.
Click here to read the original article from Corvus.
Following the introduction of AIFMD a decade ago, fund distribution in Europe has become increasingly complex for non-EU sponsors. The solution that’s routinely presented to deal with this is to appoint a third-party Alternative Investment Fund Manager (AIFM) to unlock a pan-European marketing passport. Over the past five years we have seen this approach increasingly adopted and, following the introduction of the Cross Border Distribution Rules (1) in August 2021 (the CBD Rules), we are now also seeing this approach being presented as a solution for premarketing as well.