While an average distribution process may last six to 18 months, for sponsors who elect to complete European distribution using a marketing passport, the costs of compliance with the Alternative Investment Fund Managers Directive (“AIFMD”) over the ten plus two year lifecycle of their fund could add €3,000,000 or more in administrative costs. There’s clearly a place for a marketing passport but for non-EU sponsors looking to market non-EU funds, this should not be considered the default option.

In this article we will take a look at how non-EU funds can be effectively distributed in Europe, the impact of this from a legal/regulatory perspective and the cost differences between electing to use a passported Luxembourg based fund solution and marketing a non-EU fund under Article 42 of AIFMD.