AIFMD II Day One Compliance: A Practical CEO Guide
AIFMD II Day One Compliance: A Practical CEO Guide
As of January 2026, the luxury of "wait and see" has expired. With the April 16, 2026 deadline to adopt AIFMD II (Directive (EU) 2024/927) only a few months away, time is short.
Non-EU managers (US, UK, UAE) need to prepare quickly.
EU-based AIFMs also need to act now.
Everyone is in the final push to meet the deadline.
For a marketing-led fund, compliance is no longer a back-office burden. It is the key requirement to access European capital. If you don’t update your structure by the deadline, you could face immediate friction with your “passport” or NPPR status.
Below is the definitive 2026 checklist for AIFMD II readiness.
It focuses on three pillars that will define winners in the new regime.
1. The Substance Audit: The "Two-Person" Requirement
With Article 8, the European Union has set a strict standard for human resources. This aims to remove "letterbox" companies and ensure real oversight.
The Requirement: Each Alternative Investment Fund Manager (AIFM) must have at least two people. These individuals must be domiciled in the EU and work full-time for the AIFM.
The Challenge: Numerous boutique managers depend on part-time directors or outside consultants. Under AIFMD II, regulatory bodies like CSSF, AMF, and BaFin will require proof of permanent residency. They will also ask for evidence of actual time commitment.
The Dorhyan Approach: Our Limited Partnership Services ensure that your governance framework meets the "Natural Person" criteria. This way, you won't need to move your main investment team early or spend a lot of money.
2. Required Liquidity Management Instruments (LMIs)
The AIFMD II establishes a standardized set of liquidity management instruments for open-ended funds, detailed in Annex V. By the April deadline, fund managers must choose and include at least two of these instruments in their fund documents.
Designers created these instruments to tackle various stress situations. Redemption gates can help manage significant outflows, especially in private credit or real estate funds. Price-based instruments, like swing pricing, safeguard remaining investors against dilution costs. In extraordinary circumstances, side pockets enable the separation of illiquid assets during times of market turbulence.
ESMA guidance now requires that the choice of LMTs be appropriate to the fund’s investment strategy. A simple “tick-the-box” method is not enough anymore. Managers need to explain and adjust their choices.
3. The Private Credit "Lending Passport"
AIFMD II marks a major change for Private Credit. It creates a single loan-origination framework. It replaces the patchwork of national rules that once governed debt funds.
Leverage Limits: Open-ended loan-originating funds are now limited to 175%. Closed-ended funds now have a 300% cap.
Risk Retention: Fund managers must keep 5% of the nominal value of the loans.
These are loans they originate and later transfer to other parties.
The advantage: Funds that follow these new rules get a “Lending Passport.”
This lets them lend across all EU Member States.
They do not need local banking licenses.
This passport could reshape how private credit managers scale in Europe. Instead of setting up local structures in each country, a manager can build one EU-wide lending strategy. It follows one set of rules. That can lower legal friction, speed up deal execution, and make cross-border lending more predictable.
But the new framework also adds tighter discipline. The leverage caps will cause some open-ended strategies to rethink their liquidity terms.
They may change which assets they select. They may also change their subscription lines or other financing. The 5% risk-retention rule changes how managers handle loan sales, syndication, and distribution. If a fund often makes and sells loans, it now needs a clear, compliant retention process.
This process should be part of its deal workflow.
Loan origination is now more clearly defined and supervised. Managers will need stronger credit governance, documented underwriting standards, and ongoing monitoring. Conflicts of interest, related-party lending, and concentration risk will get more attention.
This is most true for funds lending to connected borrowers. It also applies to funds working alongside other group entities.
Overall, AIFMD II makes cross-border private credit easier—but makes it harder to do casually. The managers who gain the most will have strong credit processes, solid risk controls, and fund terms.
These terms must match the new limits on leverage and retention. The Investor Disclosure Requirement (Article 23)
By April 16, you need to revise your disclosures as per Article 23. AIFMD II requires a “Comprehensive List” that details all fees, costs, and expenses.
The AIFM incurs these and charges them to the fund. Simple "estimated ranges" are no longer adequate; increased transparency is now essential.
Why "Orchestration" is Superior to "Consulting" in 2026
Previously, you might hire a law firm for the PPM. You might hire a consultant for the LMTs. You might hire an administrator for reporting tasks. However, in the AIFMD II landscape, this disjointed strategy can result in compliance issues.
Dorhyan.eu serves as a technology-driven orchestrator that unifies these needs into one seamless workflow. We don’t just inform you about the regulations; we embed them into the core of your fund.
Is your fund prepared for the 90-day timeline? The deadline on April 16th is non-negotiable. Avoid regulatory obstacles that could hinder your fundraising activities.
