How Hedge Fund Managers Can Meet Insurance Requirements Under AIFMD

The alternative investment fund managers directive (AIFMD) imposes specific requirements for hedge fund managers and others marketing to investors in Europe to maintain either adequate capital or professional indemnity/errors & omissions insurance (PI) sufficient to cover certain potential claims.  While alternative investment fund managers (AIFMs) in the E.U. have many AIFMD-compliant products to choose from, PI policies purchased locally by many U.S. and other non-E.U. AIFMs may not meet AIFMD requirements.  In a guest article, Simon Holt, Senior Underwriter – Financial Institutions at Pioneer Underwriting Limited, examines the requirements for PI insurance under AIFMD; the availability of such insurance to AIFMs; common areas where insurance policies fall short of the AIFMD requirements; and AIFMD-compliant insurance solutions available to U.S. AIFMs.  See also “Passports, Platforms and Private Placement: Options for Marketing Funds in Europe in the Post-AIFMD Era,” Hedge Fund Law Report, Vol. 8, No. 17 (Apr. 30, 2015).

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