Alternative Investment Fund Managers Directive (AIFMD)
Categories: Derivatives, Trading, Investing, International, Banking
A law passed by the EU in 2011 that deals with the regulation of hedge funds and private equity, along with other investment vehicles deemed "alternative” to traditional types of funds. The provisions required registration of firms seeking to provide these kinds of investment services. The legislation also set up a series of disclosure requirements.
Hedge funds and private equity (and other types of similar things) are pools of money that operate with fewer restrictions than typical mutual funds. The goal of these types of companies is to give their managers more leeway to make profits. Traditionally the haven of wealthy investors, in the 2000s, word of hedge funds and private equity had trickled down to regular retail investors, who wanted the chance for additional profits that these places provided.
As they became more popular, with a wider segment of the investing population getting involved, there was a push for more oversight and regulation. The AIFMD is part of this movement, creating guidelines to police the industry across most of Europe.
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Finance: What is an Alternative Investme...2 Views
Finance a la shmoop...What is an alternative investment hmm well maybe we
should start with the opposite to define the term here sort of like with the fine [Good Housekeeping catalog]
people at Good Housekeeping do a primary or base or fundamental investment is
something easily tangible, understandable and definable like a collection of
stocks.. Primary also includes a collection of bonds simple like what
could be more primary than a t-bill or cash yeah cash that'd be primary lumpy [T-rex walking in a jungle]
mattresses well they're hard not to love so alternative is kind of the opposite
of these things mainly stuff like esoteric hedge funds, complex ownership
structures of real estate, or REITS - real estate investment trusts, commodity
ownership oh and fancy derivatives why is there a separate category for [Examples of alternative investments]
alternative investments well because when they go wrong they go oh so wrong...
and the people who own them mostly rich people and university endowments and
union pension funds those people have to sign what's called big boy and big girl [Person signs a big boy letter]
letters so that if they wake up one day in the home they thought was blessed by
the good housekeeping people is being repossessed well then the place they go [Woman opens door and reads notice of repossession]
to complain to the people responsible for making that stupid set of
investments is a mirror yeah it was clearly cracked and more than seven years
of bad luck coming... [Girl smashes mirror]