U.S. fund managers entering Europe face a complex, multi-layered regulatory landscape, the most efficient way to streamline entry into this market is through an integrated service combining fund administration, AIFM services and depositary oversight. Eva Devine and Paul Conroy explain how the three functions harmonize to deliver value for fund managers.

For U.S. fund managers seeking to raise capital in Europe, the opportunity is enormous, but so is the complexity. Unlike the U.S. regulatory landscape, Europe’s framework can be fragmented, multi‑layered and is governed by the Alternative Investment Fund Managers Directive (AIFMD). This means that any manager looking to access European investors must navigate cross‑border marketing rules and reporting requirements, as well as strict investor‑protection structures that rely on the AIFM and depositary framework.

Increasingly, non‑European managers are turning to an integrated partner who can deliver fund administration, AIFM services, and depositary oversight under one roof. When these services work together, with the requisite governance, independence and segregation of duties, they provide a simplified and efficient route into the European market without compromising regulatory integrity.

This article explores what each service brings, how they complement one another, and why a unified model offers strategic advantages for U.S. fund managers preparing to market and operate funds across Europe.

Understanding the European model

Europe does not operate with a single securities regulator or a uniform compliance regime. Instead, marketing a fund in one Member State can carry different obligations, filings and oversight requirements than marketing in another. Managers must choose between routes such as the AIFMD marketing passport or individual National Private Placement Regimes (NPPR), each of which determines the governance, reporting and oversight requirements at fund level.

Managers also must manage evolving expectations around environmental disclosures, valuation oversight, risk management, and cross‑border reporting, which is why having access to strong operational partners is essential.

The European model requires three core functions:

• Fund administrator – to maintain books, records, investor reporting and day‑to‑day operations
• AIFM – responsible for regulatory governance, risk management, valuation oversight and Annex IV reporting
• Depositary – an independent “watchdog” overseeing cash monitoring, safekeeping and compliance.

Although separate in responsibility, these functions converge around the same data, investor flows and transactions, which is why seamless coordination between them delivers success.

What each function delivers

• Fund administrator: The engine room of European operations

The fund administrator handles the operational lifecycle of a fund, including NAV production, investor reporting, capital activity processing, reconciliation and maintenance of financial books and records. This ensures that valuation cycles, investor notices, and reporting obligations are executed accurately and on time. For U.S. managers used to leaner operational setups, the European environment adds layers — multi‑jurisdictional filings, GAAP variations, regulatory disclosure frameworks, and heightened investor reporting standards. A high‑quality administrator brings the technology, templates and specialized expertise required to meet these expectations.

• AIFM: Governance, oversight and regulatory structure

A key difference between U.S. and EU regimes is the AIFM role. An AIFM governs the fund under AIFMD rules and is responsible for risk management, valuation oversight, compliance, regulatory filings and, potentially, elements of portfolio management oversight. For U.S. managers, building an in‑house AIFM is often not pragmatic. Establishing an AIFM can take up to two years and carries a high ongoing cost, driven by capital requirements, staffing, technology and regulatory obligations. By contrast, partnering with an established third‑party AIFM gives immediate access to the EU market and removes the need for heavy investment in infrastructure.

• Depositary: The independent oversight layer

Under AIFMD, most European fundraising requires an authorized depositary: an independent function monitoring cash flows, safekeeping assets, verifying ownership, overseeing valuation processes and ensuring the fund is managed in accordance with local regulations. Its purpose is investor protection, creating a challenge function that regulators view as non‑negotiable.

What is important is that a depositary cannot simply “trust” a manager’s data, instead it must apply oversight and scrutiny, ask challenging questions, and proactively identify issues before they become regulatory breaches.

Why these services work better together

While the three functions must remain operationally independent, offering them under one roof, and within a strong control framework, brings significant advantages, including:

• Reduced duplication, faster turnaround times: Shared platforms and common workflows allow for straight‑through data flow, reducing duplication of tasks such as NAV checks, reconciliation or valuation reviews. This means faster reporting cycles and fewer operational errors.
• Aligned methodologies across risk, valuation and reporting: Instead of reconciling three separate approaches across providers, a unified partner ensures consistency in valuation frameworks, risk monitoring, reporting formats, governance processes, and regulatory interpretations. This reduces friction, accelerates resolution of issues and ensures that stakeholders are working off the same underlying principles.
• A single relationship and onboarding experience: In a multi‑provider model, managers must coordinate onboarding across three organisations each with its own processes, documentation needs and timelines. A single‑partner model eliminates the handoff problem, reducing weeks of administrative complexity. For example, having a single team to manage transition, knowledge sharing and technology coordination from the outset prevents potential gaps.
• Strong governance without compromising independence: European regulations require independent oversight between the AIFM, administrator and depositary. With segregated teams and appropriately structured reporting lines, all three functions can exist independently within one organisation, this maintains the required regulatory integrity while delivering the benefits of shared knowledge and coordination.

The benefits for U.S. managers entering Europe

• Quicker market entry: Using a third‑party AIFM unlocks the ability to market immediately in the EU without needing to build a regulated entity. This reduces time‑to‑market from years to weeks.
• Operational efficiency: A single partner drastically reduces cost burden by reducing duplicated reconciliations, eliminating parallel onboarding streams, removing back-and-forth across providers, and streamlining reporting cycles, the result is fewer errors, faster data delivery and fewer resourcing requirements.
• Higher quality oversight: An integrated depositary gains visibility into the administrator’s processes through proximity and data transparency. This allows for deeper oversight, faster escalation of concerns and a more robust compliance environment.
• Scalability across jurisdictions: European fundraising rarely stops at one jurisdiction. With an integrated partner, managers avoid the complexity of stitching together local providers in other jurisdictions. These unified teams and platforms support expansion across structures, vintages and strategies without re‑engineering operations.
• More effective risk management: Integrated teams coordinate documentation, regulatory filings, AML processes, closings, investor onboarding, and technology across functions, providing continuity and reducing launch risk.

For U.S. fund managers, Europe represents an attractive but operationally challenging investor market. The regulatory framework is intricate, and investor expectations around governance, oversight and reporting are high.

A unified partner providing fund administration, AIFM services and depositary oversight offers the most efficient, secure and scalable route into the market. This approach combines the regulatory assurance European investors demand, the operational excellence managers require, and the speed to market needed to capitalise on fundraising windows.

As more U.S. managers look to expand into Europe, the single‑partner model is rapidly becoming the gold standard for building a compliant, efficient and investor‑ready European operating platform.

A fund administrator, with a proven track record in Europe, can guide managers efficiently through the process, handling the heavy lifting and taking on the critical tasks necessary to ensure compliance with European regulations, smooth operations, and effective fund management on an ongoing basis. To find out more about our single-partner model, please contact us directly or download our guide.

Luxembourg has reformed its company law around bank account opening and upfront funding to meet the practical needs of founders of Private Limited Liability Companies. Angel Ramon Martinez Bastida and Fran Raffa explain how the changes are cutting early capital calls, reducing administrative friction, and improving execution speed in competitive processes

Luxembourg has adopted a long‑awaited reform to its company law, allowing founders of SARLs (Private Limited Liability Company) and SARL‑S (Simplified Private Limited Liability Company) to defer payment of the statutory minimum share capital for up to 12 months after incorporation.

While the change may appear technical, by decoupling bank account opening and incorporation, it will be easier to set up SARLs and SARL-S quickly and in a way that’s aligned with how deals unfold. This reinforces Luxembourg’s position as a deal‑ready jurisdiction.

What has changed?

At its core, the reform addresses a 1930s rule that is no longer fit for purpose with modern regulatory and transactional requirements.

By modernising this aspect of company law, Luxembourg improves its speed‑to‑market without compromising investor protection, which is preserved through transparency, founder liability and disclosure requirements for unpaid capital.

Under the previous regime, a Luxembourg SARL was required to fully pay up the EUR 12,000 minimum share capital before incorporation, which in practice meant opening a local bank account in advance. Given increasingly stringent AML and KYC processes, this delayed incorporations by weeks or even months.

Though a welcome change, this doesn’t address the other bottleneck in the process which is the astonishingly long time it takes to open a bank account in Luxembourg, instead it is a workaround for misaligned timings through deferring payments.

The new law amends the 1915 Companies Law to allow SARLs and SARL-S:

• Full subscription of the minimum share capital at incorporation
• Deferred cash payment of that capital for up to 12 months
• Deferral limited to cash contributions only; any capital above EUR 12,000 and contributions in kind must still be paid immediately
• Share premium (if any) remains payable at incorporation and is not eligible for deferral
• Safeguards include transparency/disclosure, founder liability, and potential suspension of voting rights if payment is not made after a proper call.

You can read an interview about this development in Paperjam here.

How does better support private markets managers?

For private market managers, Luxembourg SARLs and SARL-S are frequently used as acquisition vehicles, investment holding companies and SPVs within fund structures. These entities often need to be incorporated very quickly to support competitive bidding processes even though the cash is typically only funded at closing, sometimes weeks later. The previous requirement to pre-fund share capital (coupled with the need to open a bank account upfront) sat awkwardly with how private markets transactions actually run, creating friction between legal formation and deal execution.

By allowing the payment of the statutory minimum share capital to be deferred, the new regime better aligns Luxembourg company formation with private markets deal timelines. It enables faster incorporations, reduces the need for early or contingent capital calls, and removes a common administrative bottleneck at the most time‑sensitive stage of a transaction. In doing so, it makes Luxembourg structures more agile and easier to deploy in competitive processes, while bringing SARLs and SARL‑S closer to the flexibility already available elsewhere in the private markets ecosystem.

What do managers need to do now?

To fully benefit from the reform, managers should approach deferred capital as a deal‑execution tool, not just a legal option.

In practice, this means:

• Assess early whether deferring the minimum capital fits the transaction timeline and avoids unnecessary early capital calls
• Draft the articles correctly from day one, clearly setting out how and when unpaid capital will be called
• Align bank onboarding and funding with the deal timetable, rather than with incorporation
• Ensure clear tracking and ownership of any unpaid capital and related disclosure obligations
• Work with local partners who can coordinate incorporation, banking and first investment as a single, deal‑ready process.

Handled well, the reform allows managers to move faster, stay flexible in competitive situations, and deploy Luxembourg structures in line with private markets deal dynamics.

What’s next?

The law was adopted on 28 April 2026. It will enter into force following its publication in the Luxembourg official gazette, subject to the final constitutional formalities. The regime will apply to SARLs and SARL‑S incorporated as from that date.

How does a fund administrator support the change?

As a leading private markets fund administrator, with a proven track record in Luxembourg, Aztec can guide managers efficiently through the process, handling the heavy lifting and ensuring managers quickly benefit from this change. To find out more, please contact us directly.

In Part 2 of the Alternative Insight podcast, Private markets rewired: What’s next for AI?, the conversation moves from experimentation to execution, focusing on what it takes to embed artificial intelligence (AI) responsibly across private markets organizations.

Aztec’s Head of Process Digitization and Optimization Paul White is again joined by Adam Hofmann, AI Transformation Partner at Elixxir; Henrik Ceder, Chief Digital Office at Norvestor; and Aztec’s Director of Data, Will Relf.

Together they discuss:

• How evolving regulation can be translated into practical guardrails
• What an effective operating model for AI looks like
• How firms can address security, compliance and cost concerns
• Why strong data foundations and human judgement remain critical to AI adoption
• What differentiates the firms that have successfully embedded AI.

Listen to the Alternative Insight podcast episode:

Listen to “Part 2 – Private markets rewired: What’s next for AI?” on Spreaker.

If you like what you heard, head to Spotify, Apple Podcasts or wherever you listen to podcasts, find Alternative Insight podcast by the Aztec Group and hit the subscribe button, so that you receive all future episodes as soon as they’re published!

Podcast disclaimer:
This recording has been prepared by the Aztec Group and is made available by Spreaker for and on behalf of the Aztec Group for private or non-commercial use. By accessing this podcast you acknowledge that the entire content and design of the podcast are the property of the Aztec Group and are protected under applicable laws and should only be used for private or other non-commercial use. You further acknowledge that neither Spreaker nor the Aztec Group provide any warranty, guarantee or representation as to the accuracy or sufficiency of the information featured in the podcast. Information and opinions are provided for general information purposes only and do not constitute legal or other professional advice. Any reliance you place on such information is strictly at your own risk. For full details please click here.

Nearly 70% of private funds CFOs say they are piloting or actively implementing AI, yet only 2% believe it is fully embedded.

This headline finding from our 2026 Private Funds CFO Insights Survey highlights both strong momentum and significant execution challenges across the industry.

In this episode of Alternative Insight, ‘Part 1 – Private markets rewired: What’s next for AI?’, Aztec’s Head of Process and Optimisation, Paul White, is joined by Adam Hofmann, AI Transformation Partner at Elixxir; Henrik Ceder, Chief Digital Office at Norvestor; and Aztec’s Director of Data, Will Relf, to examine how private markets firms are approaching AI today.

During this episode they discuss:

• How regulation is influencing AI adoption
• Why firms are implementing AI at different speeds
• The different types of AI being used across organizations
• How managers can prioritize implementation for meaningful business outcomes.

Listen to the Alternative Insight podcast episode:

Listen to “Part 1 – Private markets rewired – What’s next for AI?” on Spreaker.

If you like what you heard, head to Spotify, Apple Podcasts or wherever you listen to podcasts, find Alternative Insight podcast by the Aztec Group and hit the subscribe button, so that you receive all future episodes as soon as they’re published!

Podcast disclaimer:
This recording has been prepared by the Aztec Group and is made available by Spreaker for and on behalf of the Aztec Group for private or non-commercial use. By accessing this podcast you acknowledge that the entire content and design of the podcast are the property of the Aztec Group and are protected under applicable laws and should only be used for private or other non-commercial use. You further acknowledge that neither Spreaker nor the Aztec Group provide any warranty, guarantee or representation as to the accuracy or sufficiency of the information featured in the podcast. Information and opinions are provided for general information purposes only and do not constitute legal or other professional advice. Any reliance you place on such information is strictly at your own risk. For full details please click here.

For private markets managers seeking to domicile their fund in Europe, there’s a compelling case for choosing Ireland. Kevin Hogan and Marcia Rothschild give five reasons why Ireland is attracting more interest from U.S. managers looking to fundraise in Europe.

Private markets assets under management (AUM) globally are projected to grow by 87% over the next six years, reaching $26 trillion by 2030. Over the past decade, Irish-serviced private markets assets have grown 13-fold, rising from $36 billion in 2015 to $451 billion in 2025. What’s notable is that Ireland is not simply an administrative hub anymore, $246 billion of those assets are now Irish-domiciled.

Growth rates tell an even clearer story. Ireland is now growing at 21% CAGR (compound annual growth rate), close behind Luxembourg’s 24%, and is on track to surpass Jersey and Guernsey by 2027, well on its way to becoming Europe’s second biggest private markets country of domicile.

Some of what is driving this momentum is timing. While Luxembourg’s dominance was cemented following the 2008 financial crisis, Ireland is now actively in the catch‑up phase. Ireland’s regulatory framework, deepening talent pool and scaling infrastructure are meeting the needs of a market increasingly characterized by larger funds, semi‑liquid structures, and global promoters looking for operational reliability and common‑law familiarity.

And the promoter mix is shifting dramatically. The U.S., which currently represents 26% of Luxembourg’s private markets assets under management (AuM), is choosing Ireland at higher rates, while UK managers and wider English‑speaking markets (Canada, Australia and others) are also driving increased demand for Irish structuring and servicing. This data shows that Ireland is becoming a domicile of choice for managers who want European market access anchored in an English‑speaking, common‑law ecosystem.

With strong uptake in Irish Collective Asset‑management Vehicles (ICAV), growing interest in Irish Limited Partnerships (ILP) and a significant footprint in private credit, which equates to €155 billion ($180 billion) of Irish‑serviced assets, this shows how Ireland is diversifying as it scales as a private markets domicile.

Ireland’s appeal is also strengthening within the expanding ELTIF 2.0 landscape, which is reshaping how managers access a wider European investor base. Since the 2024 legislative overhaul of ELTIFs, Ireland has gained momentum as an option for these types of retail-friendly vehicles, capturing an increasing share of them and positioning itself as a credible alternative to Luxembourg for EU‑wide distribution. This is why those managers setting up next‑generation ELTIFs, particularly those focused on semi‑liquid private credit, private equity and real assets funds, are considering Ireland for its growing expertise in retail‑appropriate fund design.

With the foundations to flourish now in place, Ireland is arguably a rising powerhouse with the means to service evolving requirements as private markets continue their march toward larger funds, semi‑liquid structures, and global investor reach.

We recently hosted an Insights briefing in Dublin, during which a panel of private markets experts discussed the key trends impacting private markets, and Ireland as a jurisdiction of choice more generally.

Here are the 5 key takeaways from that discussion, given by some of the leading voices in Ireland’s private markets sector:

1. Ireland’s fundraising landscape is entering a decisive new phase. Once viewed as a secondary option to more established hubs like Luxembourg, the jurisdiction is now gaining meaningful traction with global managers. A growing number of GPs are choosing Ireland as the base for new fund launches, and several others are actively establishing operations, signaling a shift in market behavior. Regulatory enhancements and a notably open, pro‑manager environment are reshaping Ireland’s competitiveness, making it an increasingly attractive destination for investors and managers seeking alternatives for European fund launches.
2. Growing investor confidence in Irish fund structures. Investor familiarity with Irish fund vehicles is increasing rapidly, strengthening Ireland’s position as a credible home for private markets activity. Limited Partners are becoming more comfortable with structures such as the ICAV and ILP, both of which combine robust regulatory oversight with meaningful operational flexibility. This blend of protection and adaptability is particularly appealing to global investors who require bespoke structuring options without compromising on governance standards. As adoption of these vehicles continues to rise among both managers and LPs, Ireland’s framework is demonstrating clear signs of maturity. Positive investor experiences are reinforcing confidence in the jurisdiction, helping to elevate Ireland as an attractive, reliable destination for private markets fund formation and long‑term investment activity.
3. Ireland’s operational ecosystem supports scalable, tech-enabled fund operations. Ireland is steadily cultivating an ecosystem recognized for operational excellence, supported by an experienced network of service providers and fund directors. As private market managers deepen their presence in the jurisdiction, they are benefiting from Ireland’s strong capabilities in fund administration, compliance, and regulatory support. Outsourcing solutions are increasingly sophisticated, enabling managers to scale efficiently and meet rising expectations around transparency and risk management. At the same time, Ireland is embracing new technologies, particularly artificial intelligence, as a means of enhancing data analysis, strengthening operational workflows, and future‑proofing fund operations. This combination of deep local expertise, collaborative industry culture and a forward‑looking mindset positions managers to leverage Ireland’s operational strengths to their advantage. Together, these attributes reinforce the jurisdiction’s reputation as an agile, supportive, and strategically aligned environment for private markets operations.
4. Regulatory reform driving Ireland’s rise. Ireland’s ascent as a private markets jurisdiction is being fuelled by a wave of regulatory reforms and industry‑led initiatives that are reshaping its competitive position in Europe. Forthcoming updates to the 8th AIF Rulebook and the implementation of AIFMD 2.0 are set to further harmonize Ireland’s regime with other leading European markets, creating a more consistent and accessible framework for managers operating cross‑border. These changes will help streamline fund launches and day‑to‑day operations, enabling managers to establish vehicles that meet pan‑European standards with greater ease. Ireland’s regulatory toolkit now rivals that of more established domiciles, offering the structures, flexibility and investor‑friendly features that both managers and LPs increasingly expect. The jurisdiction’s evolving framework is enhancing its appeal to international managers seeking reliable, flexible and innovative fund solutions laying the groundwork for further growth.
5. Ireland’s package is attractive to business. Confidence in Ireland’s future as a private markets hub is steadily rising, driven by a clear “open for business” approach across the industry. Service providers and the wider ecosystem are working collaboratively to create a supportive, responsive regulatory environment that resonates with both managers and investors. Ireland’s combination of reliable fund structures, a highly skilled professional community, and a proactive regulatory regime is becoming an increasingly compelling proposition. The private markets space is expanding in scale and sophistication, and as the industry continues to innovate and embrace new opportunities, Ireland’s reputation for professionalism, flexibility, and strong partnership continues to be defined.

Ireland’s growing strength as a sophisticated, investor‑friendly domicile offers managers a powerful platform for scalable and secure fund launches. With deep local expertise and an integrated service model, as Europe’s leading fund administrator Aztec provides the end‑to‑end support managers need to establish and operate confidently in Ireland. If you’d like to discuss any of the points raised here, please contact us directly.

The revised Directive brings clarity in some areas, new obligations in others, and fresh opportunities for managers who are prepared. Angel Ramon Martinez Bastida and Maria Von Oldenskiöld recap the key changes private markets managers should be focusing on ahead of this month’s implementation deadline.

With the Alternative Investment Fund Managers Directive (AIFMD) 2.0 due to be transposed into national law across EU member states by 16 April 2026, private markets managers are entering a defining period of regulatory change. While the amendments were adopted at EU level in April 2024, their practical impact will be shaped by national transposition choices and supervisory practice.

In key alternative fund domiciles such as Luxembourg and Ireland, AIFMD 2.0 largely confirms existing market practice in some areas, while introducing material changes in others — most notably around loan origination, delegation oversight, liquidity management tools and disclosures. Managers should therefore move beyond a purely EU‑level reading of the Directive and assess how the new rules will apply in their chosen domicile, taking into account local regulatory expectations, transitional arrangements and operational realities.

Below, we break down the most relevant changes for managers operating in Luxembourg and Ireland, what they mean in practice, and how third‑party fund administrators can support implementation.

1.AIFMD 2.0 introduces a harmonized framework for loan origination

What’s changing?

For the first time, AIFMD 2.0 establishes an EU‑wide regime governing loan origination by alternative investment funds (AIFs), representing a significant development for private credit strategies.

AIFMD 2.0 introduces:

• a formal definition of loan origination and loan‑originating AIFs (where loan origination is the main strategy or represents at least 50% of NAV);
• restrictions on originate‑to‑distribute strategies;
• leverage limits (175% of NAV for open‑ended AIFs and 300% for closed‑ended AIFs);
• concentration limits, including a 20% cap on lending to certain financial counterparties;
• a 5% risk‑retention requirement for loans subsequently transferred; and
• enhanced disclosure obligations covering costs, portfolio composition and risk metrics.

Same Directive, different playbooks

In Luxembourg, the draft transposition confirms that AIFs are explicitly permitted to originate loans, while maintaining the long‑standing prohibition on consumer lending. Importantly, Luxembourg adopts the EU‑level leverage, concentration and risk‑retention limits without gold‑plating, providing legal certainty for private credit managers.

In Ireland, the Central Bank is using AIFMD 2.0 as an opportunity to re‑engineer the AIF Rulebook, replacing the existing domestic loan‑origination regime with the new EU framework. This includes the removal of the L‑QIAIF category and enabling loan origination across the wider QIAIF regime, again without additional local overlays.

What does it mean for managers?

Private credit managers will need to reassess fund structuring, liquidity management, leverage policies and operating models to ensure alignment with the new framework. In both Luxembourg and Ireland, loan‑originating AIFs are in practice likely to remain predominantly closed‑ended, except where managers can clearly demonstrate that their liquidity risk management framework supports an open‑ended structure.

Managers should also factor in the five‑year grandfathering regime available for certain pre‑existing loan‑originating AIFs and assess carefully whether subsequent capital raising may affect eligibility.

What support do managers need?

A third‑party fund administrator with private credit expertise can support managers by:

• interpreting the loan‑originating AIF classification rules;
• assisting with liquidity, leverage and concentration monitoring;
• aligning disclosures and reporting with AIFMD 2.0 requirements; and
• implementing governance and portfolio‑level controls consistent with the new EU framework.

Read more here.

2.Enhanced delegation and substance requirements

What’s changing?

AIFMD 2.0 does not prohibit delegation, but it extends and clarifies its perimeter, reinforcing supervisory expectations around oversight, governance and substance.

Delegation rules now apply to all Annex I functions and permitted ancillary services. AIFMs must demonstrate that delegates are appropriately qualified, that delegation arrangements are monitored effectively, and that the AIFM retains sufficient internal resources and decision‑making capacity.

Same Directive, different playbooks

In Luxembourg, the transposition clarifies that delegation requirements apply consistently across a broad range of arrangements, including group entities, co‑investment vehicles and carried interest structures, reinforcing existing CSSF expectations.

In Ireland, the Central Bank is aligning its supervisory approach with the enhanced AIFMD 2.0 framework, focusing on effective oversight and management substance, rather than dismantling well‑governed delegation models.

What does it mean for managers?

The key shift for managers is evidencing how delegation works in practice, rather than eliminating it. Governance frameworks, oversight processes and documentation will be critical in demonstrating compliance.

What support do managers need?

Experienced administrators and AIFM service providers can help managers:

• review delegation frameworks;
• enhance governance and oversight arrangements; and
• prepare for increased regulatory scrutiny.

3.Liquidity Management Tools (LMTs)

What’s changing?

AIFMD 2.0 introduces a harmonised list of liquidity management tools for open‑ended AIFs.

AIFMs managing open‑ended AIFs must select at least two appropriate LMTs from a prescribed list and maintain documented procedures for their activation and deactivation. Certain activations trigger mandatory regulatory notifications.

Same Directive, different playbooks

In Luxembourg, the harmonised list applies as a minimum standard, with additional tools permitted subject to governance and disclosure requirements.

In Ireland, the revised AIF Rulebook aligns closely with the AIFMD 2.0 framework, with an increased focus on liquidity governance and transparency for open‑ended funds.

What does it mean for managers?

Closed‑ended funds remain largely unaffected, but managers with open‑ended strategies should ensure liquidity frameworks, disclosures and escalation procedures are fully aligned.

What support do managers need?

Administrators can assist with:

• LMT selection and documentation;
• integration into fund documentation and disclosures; and
• regulatory notification processes.

4.Depositary developments

What’s changing?

Depositary arrangements were a key area of focus during the AIFMD 2.0 negotiations. While the revised framework stops short of introducing a full EU depositary passport, it introduces targeted flexibility and reinforces the importance of national supervisory discretion in how these rules apply in practice.

In the end, AIFMD 2.0 introduces limited flexibility at EU level, with national competent authorities retaining full discretion over whether and how this flexibility is applied.

Same Directive, different playbooks

In Luxembourg, the option to appoint a depositary established in another member state has not been adopted. Luxembourg AIFs must therefore continue to appoint a Luxembourg‑established depositary.

In Ireland, a more flexible approach is being explored within the confines of the Directive, although approvals remain case‑by‑case and subject to regulatory justification.

What does it mean for managers?

Managers should not assume that cross‑border depositary appointments will be available and should engage early with service providers to assess feasibility.

What support do managers need?

Integrated depositary and administration providers can support regulatory engagement and operational implementation.

Read more here.

5.Enhanced disclosures and reporting

What’s changing?

AIFMD 2.0 places increased emphasis on transparency and supervisory reporting, expanding both the scope and granularity of information to be provided to regulators and investors. While further detail will follow through Level 2 measures, the direction of travel is clear for managers across jurisdictions.

The investor disclosure and regulatory reporting requirements expanded include enhanced cost transparency, delegation reporting, liquidity disclosures and, for loan‑originating AIFs, portfolio‑level reporting

The European Securities and Markets Authority (ESMA) is mandated to develop new Level 2 measures, including an updated Annex IV template.

What does it mean for managers?

Managers should treat current requirements as a baseline, with further technical detail expected ahead of implementation, and begin mapping data and reporting impacts early.

What support do managers need?

To meet AIFMD 2.0’s enhanced reporting expectations, managers need a trusted fund administrator that closely monitors regulatory developments and delivers regulatory reporting services aligned with the latest requirements, including updated Annex IV and evolving supervisory expectations.

What should managers be doing now?

Across Luxembourg and Ireland, managers should already be:

• assessing whether any AIFs fall within the loan‑originating AIF definition;
• reviewing delegation and oversight frameworks;
• mapping enhanced disclosure and reporting requirements;
• reviewing liquidity arrangements for open‑ended strategies; and
• engaging early with service providers to ensure operational readiness.

Aztec is uniquely positioned to support managers through AIFMD 2.0, offering integrated AIFM, depositary and administration services, backed by regulatory specialists closely involved in the interpretation and implementation of the revised Directive.

If you would like to discuss how AIFMD 2.0 affects your structures in Luxembourg or Ireland, please contact us.

Outsourcing can free up internal capacity for fund managers, while providing access to deeper expertise and technology. While some in the industry view outsourcing as carrying inherent risks, the reality is that with the right partner, those risks can be effectively mitigated, resulting in a more productive, reliable and scalable operating model. A recent article by AREF highlighted the benefits and potential risks of the outsourcing process. Here Richard Anthony and Daniel Kalish respond, demonstrating how each risk can be addressed and transformed into an opportunity for operational excellence.

Real estate fund managers are increasingly outsourcing fund administration functions, including accounting, investor reporting, compliance, and secretarial services, as an alternative to building and maintaining in-house teams. This market trend informed a recent article by the UK’s Association of Real Estate Funds (AREF), which explored the risks and benefits of outsourcing for private fund managers.

What stood out was that not all fund administrators approach outsourcing in the same way. The differentiator lies in how the outsourcing is structured, governed and delivered. Choosing the right partner is often the difference between a smooth, well-governed operating model and one that introduces unnecessary friction.

Below are some of the most common concerns associated with outsourcing, along with how choosing the right approach and a partner with the relevant private markets expertise and technology can effectively mitigate these risks.

You can listen to a recent discussion on the benefits of outsourcing here.

Loss of control

The risk: Outsourcing can reduce organizational control over key processes.

How it is mitigated:

In outsourced models, control is exercised through ownership of outcomes rather than ownership of tasks. For example, managers may retain sign-off, judgment and escalation authority, while administrators execute processes within clearly defined parameters on the manager’s own systems. This co-sourcing arrangement preserves real-time visibility and decision-making while removing bottlenecks and can be treated as a step to a full outsourcing solution.

Operating models should be built around shared systems and real-time transparency, rather than parallel reporting environments. Working on agreed platforms with embedded approvals and audit trails gives GPs visibility and signoff control while delegating execution. This ensures control is exercised through governance, data access and outcome ownership, not duplicated processes or shadow teams.

Key mitigations in practice:

• Clear delineation of responsibilities between GP, Investment Manager and administrator
• SLAs with defined escalation paths and exception handling
• Oversight focused on review and judgment, not replication.

Transition and onboarding

The risk: Migrating historical data, processes and systems under time pressure increases onboarding risk.

How it is mitigated:

Transition risk is addressed through front-loaded preparation. Early design workshops help to clarify roles, responsibilities, escalation points and success metrics. This shared design reduces transition risk and accelerates trust between teams.

This risk is also reduced through technology through structured data migration, controlled cutovers and parallel validation supported by industrialized onboarding tools. Standardized data models, reconciliation checkpoints and configurable workflows allow historical data and processes to be mapped, tested and phased in without disrupting business-as-usual activity.

Key mitigations in practice:

• Structured pre-onboarding discovery
• Detailed process mapping and documentation
• Phased handovers with regular checkpoints.

Quality issues

The risk: The quality of outsourced work may not meet expectations, impacting investor confidence and brand reputation.

How it is mitigated:

Quality depends on responsiveness, proactivity and expertise, and is not an output metric. There’s a clear distinction between “availability” and true responsiveness, highlighting that timely, proactive communication often matters more than having answers fully formed. Taking this one step further, the real value comes when fund administrators go beyond core reporting to support investor interactions, due diligence preparation, and one-off complexities reducing follow-up queries.

Standardized workflows, automated validation checks and exception-based reporting, ensure outputs are accurate, timely and repeatable. For example, our platforms surface issues early, flag anomalies and allow teams to focus on value-added judgment and creating a more predictable service experience. Also, regular team check-ins allow for more efficient collaboration and issue resolution.

Key mitigations in practice:

• Dedicated, knowledgeable service teams
• Proactive issue identification and communication
• Value-add support beyond “business as usual” reporting.

High staff turnover

The risk: Frequent staff changes can lead to loss of institutional knowledge and inconsistent outputs.

How it is mitigated:

Team continuity is repeatedly cited as a cornerstone of service quality. Stable teams that understand a fund’s cadence, structures and investor expectations can anticipate needs and reduce friction.

Technology also plays a critical role in reducing key‑person dependency. Documented workflows, shared systems and embedded controls ensure institutional knowledge is retained both at team and platform level.  This enables seamless handovers, consistent outputs and service continuity even as teams evolve over a multi‑year fund lifecycle.

Key mitigations in practice:

• High staff retention and investment in people
• Consistent team assignment over the fund lifecycle
• Knowledge embedded at team level, not individuals.

Communication barriers and cultural misalignment

The risk: Differences in language, culture, time zones or working styles can hinder collaboration and productivity.

How it is mitigated:

Cultural alignment, which includes shared expectations around communication, escalation and collaboration, should be established early and reinforced regularly.

Shared platforms, integrated reporting and centralized data management create consistent communication across teams and geographies. Common task management reduces friction caused by time zones or working style differences, reinforcing alignment and enabling a fund administrator to operate as a true extension of managers’ internal teams.

Key mitigations in practice:

• Regular cadence calls and touchpoints
• Shared understanding of priorities and timelines
• Cultural fit assessed as part of partner selection.

Data security

The risk: Sharing sensitive financial and investor data with third parties increases exposure to data breaches and security vulnerabilities.

How it is mitigated:

GPs increasingly scrutinise not just current systems, but the control environment behind them. A fund administrator’s technology environment should be designed to minimise manual data handling and enforce embedded controls, access permissions and auditability. Automation reduces risk, while standardized control frameworks strengthen data integrity, giving managers confidence that sensitive information is protected end-to-end.

Key mitigations in practice:

• A shared collaboration platform with the appropriate level of security protocols that reduce reliance on less secure methods like email
• Automated controls and reduced manual intervention
• Ongoing scrutiny of systems and processes.

Turnaround time and flexibility

The risk: Outsourcing can introduce delays and reduce flexibility compared to in‑house teams.

How it is mitigated:

Turnaround time depends more on anticipation than speed alone. In a successful outsourcing arrangement, a fund administrator would understand a fund’s rhythm and pre‑empt requests, while reducing last‑minute pressure. Automation and workflow orchestration provides predictable turnaround times by removing repetitive tasks and surfacing exceptions early, enabling faster, more flexible responses.

Key migrations in practice:

• Agreed upon production schedule to ensure both teams are clear on what needs to be delivered and when
• Stable teams with deep fund knowledge
• Technology that enhances human judgment.

Partnership done right doesn’t need to be about trade-offs. When built around people, governance and aligned incentives, outsourcing becomes an adaptable operating model that evolves with the fund. The research that informed AREF’s article is backed up by the recent Private Funds CFO Insights Survey 2026, in which 43 out of 100 respondents said they intend to outsource more of their fund accounting functions in the next year, aligning with the broader industry trend towards externalizing specialist tasks. This shifts outsourcing from risk to strategic advantage and for fund managers it isn’t a question of whether to outsource, but who to partner with and how that partnership is designed.

Aztec provides full outsource services and we are experienced in building and delivering tailored operating models across multiple jurisdictions. We would be delighted to talk to you about building an outsourcing partnership that works specifically for your business. If you’d like to discuss any of the topics raised, please contact us directly.

Managers looking to build the right operating model for their funds have several factors to consider, one of which is whether to keep the fund administration in-house or outsource part or all of it to an external provider. How much they outsource will depend on their specific needs, with co-sourcing emerging as an option for managers to employ, allowing them to get used to the outsourcing concept while acting as a stepping stone to a fully outsourced model further down the line, as Akbar Sheriff and Scott Kraemer discuss.

Traditionally, fund administration has involved a clear dichotomy: whether to administer fund operations in-house or outsource them to an external third-party. Faced with ever-increasing investor, regulatory, and financial pressures, more fund managers than ever now find themselves looking at the grey area between the two and towards hybrid models, one of which is co-sourcing, a first step for some on the journey to a full outsourced model. One of the main reasons managers outsource or co-source is to free up resources to do more value-add activities, while leveraging the obvious scalability opportunities a specialist fund administrator can provide.

But co-sourcing is not simply a halfway house between the two. Put simply, co-sourcing allows a manager to draw on the knowledge, expertise and resource of a specialist third-party administrator, while retaining as much visibility or control as possible of their operations, usually by having the administrator’s team working on their own in-house systems. Co-sourcing can be good way to start an outsourcing arrangement and is usually a stepping stone to a more complete outsourcing model later down the line. It allows managers to embark on that journey at their own pace, with more processes handed over and solutions provided as the relationship evolves and trust is built. A flexible approach is required on both sides, something not all providers are happy to supply.

In the Private Funds CFO Insights Survey 2026, produced by PEI in partnership with Aztec, fund managers told us about their use of third party providers and that, when it comes to administration tasks, they plan to outsource more in the coming year. Of the CFOs surveyed, 43% said they are looking to outsource their fund accounting in the next year, while 39% said they’d be outsourcing cybersecurity, 38% said they’d outsource their tax administration, and 36% said they’ll outsource compliance within the next 12 months.

You can read a full breakdown of the CFO Survey’s key findings here.

As these results illustrate, outsourcing is increasingly recognized as a strategic advantage for fund managers, and for those who want to refine their operating models and leverage their third-party exposure, co-sourcing can provide a valuable first step.

How does co-sourcing work best?

Typically, what a fund manager needs will be defined and refined iteratively by developing an operating model around the four pillars of people, process, technology, and data exchange. Front of mind throughout this exercise is often the opportunity for operational scalability and its subsequent impact (and, desirably, improvement) on the balance sheet.

Often the arguments for and against co-sourcing focus on outlining its potential benefits, countering with potential drawbacks, and exploring how each factor may contribute to unlocking operational effectiveness and financial upside. However, beyond this cost-benefit analysis is the human element which is the engine room determining the success of any co-sourcing relationship as it develops. After all, best practice outsourcing goes beyond sharing tasks – it builds strong, dynamic relationships that unlock value and opportunity for both sides.

You can listen to our recent podcast on what our clients value in a partner here.

How do people unlock success in a co-source relationship?

As covered in our Future operating models and co-sourcing considered article, the delivery model that a fund manager lands upon along the in-house to outsourcing spectrum will depend on various factors. The case for co-source lies in reducing the perceived compromise required when selecting either of the single-party delivery models, whilst enabling the benefits that both can deliver and offering a measured path to a full outsourcing model. For example, fund manager A may opt to co-source so that they can execute operations on their own platform, whilst retaining a degree of control and gaining access to the specialist talent and extensive industry knowledge of a fund administrator. As a result, fund manager A may then create capacity to increasingly focus on what they consider to be their core competencies, testing their appetite for full outsourcing at the same time.

There are also instances where the GP wants to retain full ownership and control of the single source of their own data, however they don’t have a data storage and usage strategy implemented, yet want real-time access and analysis. One of the ways these GPs can overcome this challenge is through co-sourcing while they develop their own capabilities.

Co-source benefits, whatever the motivation for the arrangement, are only unlocked as the partnership evolves. The first step is to design an operating model driven by a clear challenge statement (i.e., what does the fund manager want to achieve from co-sourcing, and what does success look like in the short, medium, and long-term?). The second, and more iterative step is to then build on this foundation and establish a relationship of trust, openness, and strategic alignment. It follows then that if outsourcing benefits require unlocking, perfecting the people element is key.

All co-source and outsource models are different, but all benefit from a coordinated team:

• Evolving strategic alignment: A partner should be flexible, and actively advocate for the fund manager to evolve, empowering them to respond quickly to challenges and opportunities.
• Skills alignment: Coordinated teams will align on ‘must-have’ requirements, which include system experience or qualifications, trusting the administrator to arrange resourcing appropriately, in some instances, the fund administrator can take responsibility for training any new hires brought into the fund manager’s business.
• Smoother workflows: To ensure efficient handovers, both teams must be aligned on roles and responsibilities, understanding how to maximize the effectiveness of their counterparts along the process flow.
• Accelerated decision-making: Relationships built on trust empower people across teams to make decisions at pace, this avoids unnecessary bottlenecks.

Building your co-sourcing relationship

Creating a strong human connection between the fund manager’s people and your provider’s teams is built on foundations that are established early in the engagement:

Establishing the relationship (Day 1):

• Align on the ‘why’: The provider needs to understand the manager’s strategic vision considering drivers such as employee experience, leveraging in-house technology, managing overheads, and strategic ambitions.
• Introduce positive change: A considered change management approach is key to a galvanized team capable of unlocking the full potential of co-source, and ultimately, outsource.
• Operating model design: Successful execution depends on planning and thoughtful alignment of people, processes, and technology.
• Governance: Establishing a co-source model requires an array of workstreams spanning a range of departments, teams, and third parties, which is why a dedicated project team ensures governance and adherence to timelines.

Developing the relationship (business as usual):

• Building a team: Recognizing a co-source partner as an integral part of the operating model fosters a strong team culture. Leadership should promote this and reinforce it through joint activities and ongoing collaboration, involving both operational and specialist teams.
• Aligned communication: Effective communication within high-performing teams relies on knowing how, when, and with whom to communicate, as well as ensuring timely updates and clear escalation paths. Third-party providers should share the same IT support and escalation framework as the fund manager’s staff.
• Coordinated staffing: Effective staffing in a co-sourcing partnership is reflected through a team built around the appropriate skills and roles. This also smooths the process when the manager decides to move to a full outsource model, this integrated team ensures the success of the migration.

Evolving the relationship (from co-source to full outsource):

As trust is established in the partnership, fund managers can naturally transition from co-source to full outsource:

• Expanding scope and accountability: Responsibility across end-to-end processes increases and progressively shifts to the administrator, reducing dependency on in-house execution. Additional fund structures may also come into scope.
• Embedded people, systems, and governance: Integrated teams, aligned controls, and shared technology frameworks enable the operating model to function beyond co-sourcing.
• Transitioning to strategic oversight: Consistent execution and stable delivery enable the manager to relax their operational involvement to oversight and value-add focus, creating the conditions for full outsourcing.

All co-source partnerships will be bespoke in their operating model, but consistent in their need for an aligned people element. As well as providing full outsource services, we are highly experienced in building and delivering tailored co-source models across multiple jurisdictions to support clients in their transition to full outsourcing and would be delighted to talk to you about developing an operating model that works specifically for your business.

The landscape of risk management for Alternative Investment Fund Managers (AIFMs) is undergoing a profound transformation. Aztec’s Group Head of AIFM Services, Paul Conroy, and Quantyx Managing Director, Michel Lempicki, explain how a partnership approach combining market-leading technology and skilled teams can create a risk management solution which can truly add value.

As regulatory requirements grow more complex and investor expectations rise, the limitations of traditional, manual approaches – often reliant on spreadsheets and fragmented workflows – are increasingly apparent. These legacy methods introduce inefficiencies, heighten operational risk, and constrain scalability. In this context, technology is emerging as a critical enabler, fundamentally strengthening the risk management process and repositioning AIFM services from a regulatory necessity to a strategic value-add.

The case for technology-driven risk management

Historically, AIFMs have managed risk through labor-intensive processes, with data scattered across disparate systems and manual interventions at every stage. This approach increases the likelihood of human error and makes it challenging to maintain robust controls or respond quickly to regulatory changes. The adoption of advanced technology platforms is changing this paradigm. Purpose-built risk management systems automate data aggregation, risk analysis, and reporting, providing a single source of truth and enabling real-time oversight.

One of the most significant advantages of these platforms is their ability to address the unique risk profiles of different asset classes. Unlike generic solutions, leading platforms now offer tailored risk categorization and reporting for the different private asset classes including private equity, real estate, infrastructure, private credit, and fund-of-funds. This granularity is essential, as each asset class presents distinct risk factors and regulatory considerations. For example, the risk analysis required for a real estate fund is fundamentally different from that of a fund-of-funds, and a one-size-fits-all approach is no longer sufficient for sophisticated managers, regulators or indeed investors.

Operational efficiency, regulatory confidence, and human expertise

The benefits of a technology-driven approach extend beyond accuracy. Automation enables AIFMs to scale their risk management functions rapidly, onboarding new funds and strategies without a linear increase in headcount. This is particularly valuable in a market where growth is often constrained by the availability of skilled personnel and the cost pressures associated with regulatory compliance. By adopting a per-portfolio business model, AIFMs can align costs with revenues, scaling up or down as needed and maintaining close control over expenses.

Regulatory scrutiny is another area where technology delivers tangible value. Modern platforms are designed with compliance in mind, incorporating features that support AIFMD and the Digital Operational Resilience Act (DORA) requirements. Automated pre-trade risk clearance, ongoing risk limit monitoring, and data validation against fund risk profiles are now achievable at scale, reducing the risk of breaches and ensuring that controls are consistently and timely applied.

Yet, technology alone is not enough. The partnership between Aztec Group and Quantyx exemplifies how combining cutting-edge technology with teams of industry-specific experts creates a bespoke managed partnership optimized for all private markets asset classes and strategies. This tech-enabled risk management solution is unique in the market today, evolving as tech capabilities do, and is distinguished by close collaboration to deliver best-in-class risk reporting at both fund and asset levels.

Data management, integration, and client-centric excellence

A critical component of effective risk management is the ability to aggregate and exchange data seamlessly across systems. Technology platforms that offer integrated data management capabilities eliminate duplication, reduce manual intervention, and support more accurate and timely reporting. For larger AIFMs, the investment in data exchange infrastructure is justified by the scale of their operations, but even smaller managers benefit from solutions that streamline workflows and facilitate collaboration with service providers.

The human dimension remains vital. Teams interpret data, anticipate challenges, and provide strategic guidance, transforming a tech-enabled service into a client-centric managed solution. The solution includes risk assessments at fund and asset levels, covering both qualitative and quantitative key risk indicators (KRIs) tailored to specific strategies. Data are pulled from underlying fund documentation, collected and stored in the software application.

Freeing people from repetitive tasks necessary for efficient fund administration means more time to focus on building relationships, solving complex problems, and delivering value beyond compliance.

Integrated risk management: real-world impact

Clients benefit from real-time risk monitoring and robust compliance frameworks, reducing exposure and enhancing investor confidence. Automation eliminates duplication and manual intervention, delivering faster turnaround times and cost savings without compromising quality. Seamless data exchange between systems ensures accurate reporting and clear audit trails. Whether managing a single fund or a complex portfolio, the model adapts seamlessly to client requirements, which supports scalability.
Built on a robust Microsoft Azure infrastructure and leveraging Aztec SharePoint, Quantyx’s risk management platform offers deep integration capabilities, supporting multiple private asset classes, to meet the highest regulatory standards possible. Enhancements are driven by user feedback and a commitment to operational efficiency and regulatory excellence.

The future evolution of AIFM services

Just as technology evolves, so too must AIFM services. Among the enhancements we expect to come are:

• Enhanced workflow automation: Streamlined data exchange and reporting, reducing friction and improving user experience.
• Client access to risk dashboards: Plans are underway to provide clients with direct online access to risk analytics, empowering them with greater transparency and control.
• Advanced AI data extraction capabilities: use of LLMs will hasten the extraction and controls to further improve data validation mechanisms.
• Information security and compliance upgrades: DORA’s regulatory requirements mean continuous investment in the application which in turn strengthens the AIFM infrastructure.

The alternative investment industry faces more complexity and compliance requirements as investment opportunities open up to a wider pool of investors, investor expectations become more granular, and market volatility becomes the norm. Harnessing technology to better manage these risks and reporting requirements is essential to remain competitive. The partnership between Aztec Group and Quantyx is a prime example of how technological agility and human expertise come together to innovate and lead change.

Technology is reshaping the AIFM risk management landscape, offering the tools needed to enhance accuracy, efficiency, and strategic value. By embracing purpose-built platforms and fostering collaborative partnerships with technology providers and expert teams, AIFMs can meet the challenges of today’s regulatory environment and unlock new opportunities for growth and differentiation.

If you’d like to discuss how AIFM services are evolving, please contact us directly.

This article first appeared in the LPEA’s magazine, Insight/Out, you can read it here: PRIVATE EQUITY INSIGHT/ OUT #37

For U.S. private markets sponsors planning pan‑European fundraising, Luxembourg has become a favored option because it combines regulatory credibility, cross‑border reach, flexible structuring, and deep servicing expertise within a single, scalable platform. Marcia Rothschild and Angel Ramon Martinez Bastida list the domicile’s virtues.

In Preqin’s Private Markets in 2030 report, European focused private funds assets under management (AuM) is forecast to reach $5.8tn by 2030, up from $3.1tn at the end of 2024, an average annual growth rate of 11%. This forecast is driven by investor appetite across the region, most notably for the infrastructure, private credit and private equity asset classes for which Preqin expects the strongest growth rates.

In their latest report on fund domiciles published in June 2024, Preqin noted that 57% of all European private capital raised in 2022 was domiciled in Luxembourg, up from 25% in 2017 and only 8% in 2011. Our analysis of Preqin’s data shows that Luxembourg’s share as a domicile for European private capital remained at a market leading level of around 50% for 2023, 2024 and 2025.

More detailed data analysis shows that U.S. private markets managers are increasingly using Luxembourg as their European fundraising base. Monterey Insight’s Luxembourg report for private market assets shows that the number of U.S. fund managers with Luxembourg-based structures has grown more than 75% since 2020, with a corresponding increase in AuM in Luxembourg-based fund structures up over 200%.

These significant growth numbers, coupled with Luxembourg’s well-respected regulatory framework and efficient distribution network, are why Luxembourg consistently emerges as an effective long‑term platform for raising capital across Europe. From our perspective as a fund administrator supporting U.S. managers, these are the 7 reasons why the domicile remains a premier gateway to Europe:

1. A distribution hub built for the passport era

If your goal is to reach professional investors across many EU member states, Luxembourg lets you do that with one set‑up. EU‑authorized AIFMs based in Luxembourg can market their AIFs to professional investors throughout the EU/EEA under the AIFMD marketing passport, typically via a 20‑day notification workflow. In practice, the passport replaces a patchwork of country‑by‑country filings with a harmonized regime, dramatically simplifying campaigns that span Germany, France, the Netherlands, the Nordics and beyond.

Luxembourg also leans into pre‑marketing, the EU’s “test‑the‑waters” regime introduced by the Cross‑Border Distribution of Funds (CBDF) package, so managers can gauge interest before activating full marketing notifications. In our recent webinar, Fundraising in Europe 101 Part 2: Demystifying regulation, we emphasized that pre‑marketing should be viewed as a way to accelerate a successful Luxembourg launch. Testing demand under pre‑marketing provides the confidence to activate the passport with clarity around target jurisdictions and investor appetite. Several member states apply identical rules to non‑EU AIFMs too, which helps U.S. managers operating via Luxembourg AIFMs or distributors to plan reliably.

What it means: With a Luxembourg AIFM and the passport, one launch can cover many countries without the uncertainty of National Private Placements Regimes (NPPR).

2. Investor‑friendly scale

European institutions want scalable, reputable frameworks. Luxembourg is Europe’s largest fund center and number two worldwide, a status confirmed across industry and regulatory sources. Recent industry body reports put net assets of Luxembourg‑domiciled funds in the €6 to 8 trillion range, underscoring depth and resilience. CSSF monthly data showed €6.19 trillion at end‑December 2025, while ALFI’s combined UCITS/AIF view for October 2025 reached €7.95 trillion.

In cross‑border distribution, Luxembourg is the clear leader. The 2025 ALFI/Broadridge study found €7 trillion in global cross‑border fund AUM by December 2024, with Luxembourg accounting for nearly half.

What it means: Luxembourg’s scale creates a shared reference point for European LPs. Familiarity with Luxembourg vehicles consistently translates into faster and smoother due diligence cycles, removing friction at the LP level.

3. Structure once, sell widely

Luxembourg’s legal toolbox mirrors U.S./UK LP economics while aligning with EU fund rules:

SCSp (special limited partnership): contractual flexibility akin to Delaware/UK LPs; tax transparent; widely used for flagship funds, feeders, co‑invests, carry vehicles and acquisition SPVs.

RAIF (Reserved AIF): “speed‑to‑market” vehicle (no prior CSSF authorization) supervised indirectly via its AIFM; open to multiple strategies and forms; and with broad adoption.

SIF, SICAR, and Part II UCIs: used where authorisation or retail interfaces are desired; often combined with the SCSp form for familiar governance.

The ELTIF 2.0 regime has further expanded the toolkit for semi‑liquid, long‑term vehicles that can be marketed to retail investors under specific protections many of which are being launched out of Luxembourg. Luxembourg hosts the majority of Europe’s ELTIFs, positioning the domicile for strategies targeting retail private markets access.

What it means: U.S. managers can replicate their preferred LP/GP dynamics (capital calls, waterfalls, advisory committees) within EU‑passport-able wrappers, speeding investor onboarding across jurisdictions.

4. Regulatory credibility with pragmatic implementation

Luxembourg’s CSSF is seen by global sponsors as both robust and pragmatic. It has been an early mover on UCITS and AIFMD, and has already transposed AIFMD 2.0, with changes that impact delegation and authorization. The changes revolve around disclosure to investors and reporting; a new loan origination regime; liquidity management tools; more freedom for depositaries; and non-EU AIFM marketing under a NPPR.

On macro stability, Luxembourg remains AAA‑rated by Moody’s, S&P, and Fitch, an important trust marker for 20‑year funds courting pension and insurance balance‑sheet capital. The CSSF’s annual report also underscores the jurisdiction’s policy predictability and commitment to cross‑border capital markets, which is precisely the environment long‑dated private strategies need.

What it means: European investors place a premium on regulatory predictability and clarity. Luxembourg’s approach and framework are well understood across the institutional market.

5. A sophisticated servicing ecosystem

Luxembourg concentrates administrators, depositaries, audit/tax advisers, AIFMs, and specialist counsel across alternatives, giving U.S. managers a deep bench for launch, operations and scaling. With funds registered and sold in more than 80 countries, this cross‑border distribution expertise translates into smoother workflows for registrations, investor reporting and regulatory updates when your distribution map spans double‑digit jurisdictions.

What it means: Luxembourg’s deep service ecosystem streamlines complex cross‑border workflows, reducing operational friction so teams can focus on fundraising and investment execution.

6. Tax neutrality

For cross‑border investor pools, the goal is neutrality to avoid economic double taxation and instead let investors be taxed in their home jurisdiction. Luxembourg’s partnership vehicles (e.g., SCSp) are typically tax transparent; fund‑level exemptions exist under multiple regimes; and the country’s double tax treaty network is extensive. These features are widely documented by auditing firms and specialist counsel and are a key reason European pension and insurance LPs are comfortable with Luxembourg vehicles.

What it means: This lets managers offer global LPs a tax‑neutral, institution‑friendly structure where investors are taxed in their home jurisdictions.

7. Retailization and semi‑liquid product options

If your strategy includes semi‑liquid private markets for qualified retail or wealth channels, ELTIF 2.0 now provides workable redemption calibration and liquidity tools opening new distribution paths across Europe under a harmonized product label. Luxembourg has been fast out of the gate in authorizing ELTIFs, and so the jurisdiction has a dominant share of ELTIFs to date.

What it means: ELTIFs give managers a credible, Europe‑wide, semi‑liquid, private markets wrapper, with flexible liquidity, diversified asset buckets, and a Luxembourg ecosystem already leading authorizations.

How Aztec can help

For U.S. fund managers planning to fundraise in Europe, a specialist fund administrator with a proven track record in Europe, a significant presence in Luxembourg and hands-on experience supporting U.S. managers on both sides of the Atlantic becomes an invaluable guide. A third-party expert can efficiently manage the process of setting up European operations, handling the heavy lifting and taking on the critical tasks necessary to ensure compliance with European regulations, smooth operations, and effective fund management on an ongoing basis.

In our experience, managers that engage early with the right partners are best positioned to execute efficiently and scale with confidence. We would welcome a conversation on how Aztec can support your expansion into Europe. Please contact us directly.

Forty-three percent of GPs say they plan to outsource more of their fund accounting functions in the next 12 months. This headline finding from our 2026 Private Funds CFO Insights Survey highlights a growing trend: outsourcing is no longer just about efficiency – it’s a path to achieving greater resilience, accuracy and strategic focus.

In this episode of Alternative Insight, ‘Making outsourcing work: The critical success factors’, Aztec’s Akbar Sharif is joined by Melanie Cohen, an independent consultant to private equity fund managers, and Richard Day, COO at Schroders Greencoat, to examine how GPs are rethinking their operating models and what separates successful outsourcing partnerships from the rest.

During this episode they discuss:

• The need for flexible operating models
• How clear governance and shared expectations set partnerships up for success
• Why responsiveness and continuity matter more than ever
• How managers can retain oversight while outsourcing execution
• The growing impact of automation and integrated data on reporting quality.

Listen to the Alternative Insight podcast episode:

Listen to “Making outsourcing work: The critical success factors” on Spreaker.

If you like what you heard, head to Spotify, Apple Podcasts or wherever you listen to podcasts, find Alternative Insight podcast by the Aztec Group and hit the subscribe button, so that you receive all future episodes as soon as they’re published!

Podcast disclaimer:
This recording has been prepared by the Aztec Group and is made available by Spreaker for and on behalf of the Aztec Group for private or non-commercial use. By accessing this podcast you acknowledge that the entire content and design of the podcast are the property of the Aztec Group and are protected under applicable laws and should only be used for private or other non-commercial use. You further acknowledge that neither Spreaker nor the Aztec Group provide any warranty, guarantee or representation as to the accuracy or sufficiency of the information featured in the podcast. Information and opinions are provided for general information purposes only and do not constitute legal or other professional advice. Any reliance you place on such information is strictly at your own risk. For full details please click here.

In an exclusive article, originally published by ACI, Kevin Hogan and Andrew Tully share how technology is transforming the entire fund lifecycle and the importance of leaders embracing an ecosystem mindset to define the next era of private credit.

For years, technology in private credit was synonymous with a single question: “What accounting system do you use?”  That choice became shorthand for operational sophistication. Today, that choice is obsolete.

The most advanced private credit fund operations aren’t defined by a system of record but by an integrated digital ecosystem, a platform that spans onboarding, loan servicing, banking, reporting, analytics, workflow automation, and data delivery. As private credit has expanded in scale, complexity, and investor expectations, the operational model has undergone a fundamental shift. Technology is no longer a functional necessity. It’s the infrastructure that shapes the end-to-end lifecycle of the fund.

The friction point: When investor onboarding breaks the experience

Investor onboarding remains one of the most critical, and historically painful, events in private credit operations. LPs often encounter repetitive information requests, lengthy email chains, fragmented communication, and uncertainty over what’s required and when. For deal driven strategies, these inefficiencies can be more than inconvenient: they can delay fund launches, extend closings, and create avoidable stress for both investors and managers.

But more importantly, onboarding is the first impression. Investors don’t differentiate between administrative workflows and the manager’s overall professionalism – the experience is one and the same. A clunky process signals disorder. A smooth, structured, guided onboarding journey signals competence.

When onboarding is digitized, built around workflows, transparency, and data reuse, the impact is immediate: fewer delays, fewer emails, less investor frustration, and a relationship that begins with confidence instead of friction. For an asset class built on trust and long-term capital commitments, that early experience matters.

Loan engines + accounting: The core of the modern ecosystem

Private credit portfolios are inherently operationally intensive. Loans amortise, draw, reset, toggle between cash and PIK interest; covenants must be tracked; fees accrue in multiple dimensions. Historically, much of this complexity was managed outside the accounting system, in spreadsheets, emails, and disconnected loan tools, forcing teams to reconcile the world manually each quarter.

Modern operations are built on event driven loan engines tightly integrated with the general ledger, ensuring:

• Loan events are captured once and flow seamlessly into accounting
• NAV is a real-time reflection of economic reality
• Waterfalls and distributions are accurate because the underlying data is accurate
• Audit trails are inherent rather than constructed.

As strategies diversify into specialty finance, ABL, NAV lending, and structured credit, the need for this unified core becomes even more pressing. It is the foundation for operational quality.

Breaking portals: The new centre of cashflow control

Treasury operations in private credit require precision and control. Funds often work with multiple banks across currencies, structures, geographies, and vehicles. Without the right technology, operations teams must jump between portals, coping with inconsistent interfaces, varied controls, and limited visibility. The result is increased operational risk, slower processing, and reduced transparency.

A unified banking portal environment solves this fragmentation. Instead of navigating disparate bank systems, teams operate through a single, secure digital interface that centralizes:

• Payment initiation
• Approvals and segregation of duties
• Cash position visibility
• Standardized controls across all banks
• Stronger protection against error and fraud

This centralized treasury capability becomes indispensable as private credit grows more complex and transaction volumes rise. It enables operational resilience while reducing the cognitive load on teams.

Automation: Driving middle and back-office efficiency

Digital transformation has reshaped the middle and back office more than any other area.

Invoice and AP automation now leverage AI to read, code, validate, and route invoices with minimal human intervention. This dramatically reduces manual effort, cycle times, and exceptions – especially valuable in multi-fund, multi-jurisdiction environments.

Data integration and analytics tools harmonise loan, cash, accounting, investor, and operational datasets. What once required hours of reconciliation now runs automatically, allowing teams to focus on exceptions, insights, and strategic tasks rather than administrative toil.

Combined, these tools free capacity, reduce errors, and strengthen the accuracy of downstream reporting.

Reporting and data on demand: From documents to dynamic insight

Reporting in private credit used to mean static, backward-looking, and slow-to-produce quarterly PDFs. But investors now expect something fundamentally different: timely, contextual insight available whenever they need it, not when the quarter allows it.

This is where modern data and reporting platforms have changed the game.

Managers increasingly rely on dashboards that provide real-time operational visibility across the fund: loan performance, cash forecasting, borrower exposure, covenant headroom, capital activity, and more. These dashboards are governed following best practice modeling, standardized metrics, consistent definitions, and secure access roles, ensuring that all stakeholders see a single version of the truth.

Beyond the quality of reporting outputs, safe, secure and on-demand accessibility to reporting is now the expectation for investors. Portals are no longer just static libraries; they serve as gateways to timely insights, empowering investors to engage with information whenever and however they choose.

The evolving role of a fund administrator

In this new ecosystem, fund administrators have become far more than accounting providers. The best administrators today act as technology partners, integrators, and operational stewards, bringing three distinct strengths:

1. In-house technology experts: Specialists who configure systems, maintain integrations, build workflows, optimize reporting environments, and design data architecture tailored to each client.

2. Ongoing investment in platforms: Administrators invest in obtaining, maintaining, and upgrading best-in-class tools so their clients don’t have to. This includes loan engines, reporting platforms, workflow systems, investor portals, and analytics tools.

3. A scalable operating model: They ensure operational quality across jurisdictions, fund structures and strategies by harmonising people, processes, and technology.

The right administrator continuously improves the operating ecosystem, helping managers adapt to regulatory changes, industry standards, and evolving investor expectations.

Conclusion: A new definition of operational excellence

Private credit’s operational transformation is about designing and orchestrating a connected digital platform that supports every stage of the lifecycle – from onboarding to reporting, from loan servicing to treasury, from workflow automation to investor engagement.

Technology has become the infrastructure through which private credit managers demonstrate professionalism, scale confidently, protect investor relationships, and deliver operational excellence.

Those who embrace this ecosystem mindset, supported by administrators who bring expertise and sustained investment, are the ones defining the next era of private credit.

This article was originally published in the Alternative Credit Investor publication, which you can read here.