In this practice note, Margaret Chamberlain, Jane Tuckley and Tim Lewis, partners in Travers Smith's Financial Services and Markets department, analyse and comment on the key aspects and potential impact of the European Commission's proposed Alternative Investment Fund Managers Directive (AIFM Directive), the text of which was published in April 2009.

The authors consider that, in its current form, the proposed AIFM Directive will have significant and unwelcome implications for the EU alternative investment fund management industry and those who provide services to it. They believe that, if the Commission's proposal is modified to remove its worst elements, it has the potential to improve the environment for unregulated funds as it should reduce significantly the cost and legal uncertainty of cross-border marketing. However, in their view, this "nirvana" is some way away.

For an analysis and comment on the key aspects and potential impact of the draft Council of the European Union AIFM Directive compromise text published by the Swedish Presidency in December 2009, see Practice note, Fundamental change for the fund industry: the AIFM Directive saga continues.

For an analysis and commentary on the texts agreed in May 2010 by the Council of the EU and the European Parliament, see Practice note, Fundamental change for the fund industry: the AIFM Directive positions agreed by Council and Parliament.