On 10 June 2020, the European Commission published its first assessment of the Alternative Investment Fund Managers Directive (AIFMD). Nearly ten years after the Directive’s adoption and seven years after its implementation across Member States, the review aimed to evaluate whether AIFMD had achieved its objectives in market growth, investor protection, and financial stability.
To conduct this assessment, the Commission appointed KPMG to perform a comprehensive study, supplemented by data from the European Securities and Markets Authority (ESMA), the European Systemic Risk Board (ESRB), as well as consultations with industry stakeholders.
The Commission’s assessment identified the following key outcomes:
Market Growth: the EU alternative investment fund industry experienced significant growth between 2008 and 2018 (almost quadrupled from €1.8 trillion to €5.9 trillion), with the cross-border marketing passport contributing to greater market integration across Member States.
Investor Protection: positive improvements were identified through more robust transparency requirements, specialised rules on conflicts of interest, and greater regulatory harmonisation across Member States.
Financial Stability: the Directive successfully established a framework for monitoring systemic risks through supervisory reporting, although the assessment identified conflicts with other EU law.
Ten years after its creation, AIFMD appears to have delivered on its core objectives: supporting market growth, improving investor protection, and enhancing supervisory oversight. The assessment also laid the groundwork for future regulatory reforms, including potential changes to delegation arrangements, liquidity management tools, and supervisory reporting harmonisation — themes that would later become central to the AIFMD review process.
Yet the broader message from the Commission is clear: Europe’s alternative investment regulatory framework is entering a new phase of evolution. For firms willing to anticipate these developments and adapt proactively, this evolution also presents an opportunity: to strengthen governance, improve transparency, and build more resilient cross-border operating models. Those that treat the review as a strategic signal rather than a backward-looking assessment will be best positioned for what comes next.