The revised Directive may be an EU instrument, but its effects don’t stop at the EU border. Maria von Oldenskiold sets out the five changes that matter most for managers in the Channel Islands, the UK and the U.S.
With AIFMD 2.0 now transposed into national law across EU member states, the conversation has naturally focused on what the revised Directive means for managers domiciled in Luxembourg and Ireland. But for non-EU managers – particularly those based in Jersey, Guernsey, the UK and the U.S. – the practical implications are just as significant, even if they arrive by a different route.
Non-EU managers typically interact with the Alternative Investment Fund Managers Directive (AIFMD) framework as delegates of an EU-authorized AIFM, as managers marketing into the EU under national private placement regimes (NPPRs), or through reverse solicitation. Each of these touchpoints is affected by AIFMD 2.0, and in some cases materially so. U.S. managers alone account for approximately 25% of net assets in Luxembourg-domiciled funds, and Channel Islands vehicles remain one of the most established routes for accessing European capital.
Below, we set out the five changes non-EU managers should be focusing on, what they mean in practice, and where to focus next.
AIFMD 2.0 does not prohibit delegation to non-EU entities, but it significantly raises the bar. Delegation rules now apply to all Annex I functions (the core AIFM functions in the Directive) and permitted ancillary services, including Markets in Financial Instruments Directive (MiFID) top-up activities. MiFID is the EU framework that regulates investment services and financial markets.
EU-authorized AIFMs must demonstrate that delegates are appropriately qualified, that oversight is continuous and effective, and that sufficient resources and decision-making capacity are retained internally. National competent authorities (NCAs) must now report annually to the European Securities and Markets Authority (ESMA) on delegation arrangements where more functions are delegated to third-country entities than are retained – and ESMA will conduct peer reviews periodically.
For UK and U.S. managers acting as delegates of EU AIFMs, and for Channel Islands managers operating through third-party AIFM structures, this is the most consequential change. The delegation model is preserved, but the governance, documentation and reporting expectations around it have moved up a level. Managers should expect more detailed due diligence from their EU AIFM counterparts and closer regulatory scrutiny of whether the AIFM is genuinely retaining substance. Investing now in robust oversight documentation is the best preparation.
AIFMD 2.0 materially broadens Annex IV regulatory reporting, covering enhanced data on leverage, liquidity, portfolio composition, costs and delegation arrangements. ESMA is developing updated templates, with further technical detail expected through Level 2 measures in April 2027. Critically, these obligations apply not only to EU-authorized AIFMs but also to non-EU managers marketing AIFs into the EU via NPPRs.
For Channel Islands, UK and U.S. managers marketing under NPPRs, this is the most immediate operational change. The volume and complexity of data to be reported is increasing, and managers should begin mapping additional data points now. Those relying on third-party AIFMs should confirm how reporting responsibilities are allocated under existing arrangements and whether adjustments are needed. The direction of travel is clear: more data, more frequently, with greater supervisory use of the information reported.
AIFMD 2.0 does not formally amend the reverse solicitation exemption, but the broader regulatory environment has materially tightened its use. Under the Cross-Border Distribution of Funds (CBDF) framework, where an AIFM or its delegate has engaged in pre-marketing in an EU member state, reverse solicitation cannot be relied upon for subscriptions from investors in that member state for 18 months. Several EU regulators have signaled an increasingly skeptical approach to reverse solicitation claims.
For U.S. and UK managers who have historically relied on reverse solicitation as a route to European capital, this is a significant shift. The 18-month bar, combined with greater regulatory scrutiny, means reverse solicitation is no longer a reliable primary strategy – it is, at best, a residual exemption for genuinely unsolicited approaches. Managers should review fundraising workflows carefully and, where reverse solicitation is no longer viable, consider formalising EU marketing under an NPPR or through a third-party AIFM with distribution capabilities.
AIFMD 2.0 establishes, for the first time, a harmonized EU-wide regime for loan origination by AIFs. This includes leverage limits (175% of NAV for open-ended and 300% for closed-ended funds), concentration limits including a 20% cap on lending to financial counterparties, AIFs and UCITS, a 5% risk-retention requirement for transferred loans, restrictions on originate-to-distribute strategies, and enhanced disclosure obligations. While these rules apply directly to EU-authorized AIFMs, the impact extends to non-EU managers wherever they manage or advise EU-domiciled loan-originating AIFs – whether as delegates, sub-advisors or through third-party AIFM structures.
Private credit is one of the fastest-growing alternative strategies, and many non-EU managers, particularly from the U.S. and UK, manage EU-domiciled funds with significant loan origination activity. Where those funds fall within the AIFMD 2.0 classification, the full suite of requirements applies regardless of where the investment manager sits. Channel Islands managers should also assess whether the new framework changes the relative attractiveness of EU versus non-EU fund domiciles for their credit strategies. A five-year grandfathering regime is available for certain pre-existing loan-originating AIFs.
AIFMD 2.0 updates the conditions for NPPR access without introducing a full third-country passport. Key changes include updated cooperation agreement requirements between EU and non-EU supervisory authorities and a new condition that the third country must not be listed as a high-risk jurisdiction under EU AML legislation or as a non-cooperative jurisdiction for tax purposes.
For managers in Jersey, Guernsey, the UK and the U.S., the preservation of NPPRs is the headline — and it is good news. These jurisdictions are not on any relevant blacklist, and cooperation agreements are well established. However, the compliance infrastructure around NPPR marketing is becoming more demanding, particularly when combined with expanded Annex IV reporting and disclosure obligations. From a competitive perspective, some commentators have observed that AIFMD 2.0 may reinforce the attractiveness of non-EU domiciles. As EU-domiciled AIFMs face increased regulatory complexity, non-EU structures marketed via NPPRs may offer a more streamlined alternative for managers who do not require a full EU passport.
Across the Channel Islands, the UK and the U.S., managers should already be:
Navigating these changes requires advisors and service providers who understand the interplay between EU regulation and non-EU operating models. An experienced fund administrator with multi-jurisdictional capabilities can help managers review delegation frameworks, align reporting infrastructure with evolving Annex IV requirements, structure compliant fundraising processes, and ensure NPPR filings and disclosures are up to date across each member state where marketing takes place.
Aztec Group supports non-EU managers across Jersey, Guernsey, the UK and the U.S. with integrated fund administration, AIFM and regulatory services. If you would like to discuss how AIFMD 2.0 affects your European operations, please contact us directly.
You can read a full interview with Angel Ramon about the changes in Paperjam: Delegation, reporting, liquidity: the operational challenge of AIFMD II | Paperjam English News
24 March 2026 Paul Conroy