The Dutch Ministry of Finance’s transposition of the EU's Alternative Investment Fund Mangers (AIFM) directive bill has singled out private equity and real estate funds for a more lenient depository regime.
Specific requirements have yet to be laid out in the bill, but closed-ended funds with lock-ins of at least five years with assets that are “generally not required to be held in custody” will have a more relaxed regime, according to law firm Loyens & Loeff.
GPs are pushing for fund administration providers and other non-bank entities to fulfill depository obligations under the AIFM directive.
As it stands, the Dutch bill will allow private equity and real estate assets to be held by “an entity which carries out depository functions as part of its professional or business activities” as well as custodian banks.
This means that lawyers, notaries or trust companies could act as depositories as they are already regulated. However fund administrators would not meet this criterion in the Netherlands.
The bill also amends the country's private placement regime by allowing GPs to market their fund to 150 qualified investors (up from 100) before needing to obtain a license from the Netherlands Authority for the Financial Markets.
US fund managers, who are registered with the Securities and Exchange Commission, will be pleased that the Dutch “designated states regime” has been left untouched by the bill. This allows US managers to market into the Netherlands without obtaining a license as they are assumed to be subject to adequate supervision by local regulators.