AIFM and UCITS Manager License in 2026: The Complete Guide

AIFM and UCITS in one page

Two EU directives cover the licensing of European fund-management firms. AIFMD (Directive 2011/61/EU) covers the managers of alternative investment funds (AIFs): private equity, venture, real estate, hedge, private credit, infrastructure, evergreen funds and nearly every vehicle that is not a retail UCITS. UCITS (Directive 2009/65/EC, as consolidated) covers the managers of retail harmonised funds. Both regimes offer a single EU passport.

The directives were updated by AIFMD 2.0 and UCITS VI (Directive (EU) 2024/927), with national transposition by 16 April 2026. AIFMD 2.0 introduces harmonised rules on loan origination by AIFs, liquidity management tools, delegation substance and depositary passporting, while UCITS VI aligns some rules with AIFMD. Reporting updates apply from 16 April 2027.

A firm can be dually authorised as AIFM and UCITS ManCo under a "super ManCo" licence, which is the most common setup in Luxembourg and Ireland, the two dominant EU fund hubs.

Sub-threshold AIFM: registration only

AIFMD Article 3(2) lets smaller managers operate under a registration regime. The thresholds are:

• EUR 100 million in AUM if the funds use leverage or are open-ended.
• EUR 500 million in AUM if the funds are unleveraged, closed-ended and have a 5-year lock-up.

Sub-threshold AIFMs are registered with their home NCA, not authorised. They must provide annual reporting and comply with basic organisational rules, but they are not subject to the full AIFMD operational, prudential and transparency regime. The trade-off: no EU passport. A sub-threshold AIFM cannot market across borders; it can only use the national private placement regime (NPPR) of host states, and many host states have phased out NPPR under AIFMD 2.0.

Options to scale up: voluntarily opt in to full AIFMD authorisation (allowed under Article 3(4)) and gain the passport, or re-domicile the funds through a licensed AIFM (a ManCo-as-a-service provider in Luxembourg, Ireland or Malta).

Full AIFM capital and own funds

AIFMD Article 9 sets a three-layer capital requirement for full AIFMs. UCITS Directive Article 7 mirrors the same formula for UCITS ManCos.

1. Initial capital. EUR 125,000 for an externally appointed AIFM or UCITS ManCo. EUR 300,000 for a self-managed AIF or self-managed UCITS SICAV.
2. AUM-based add-on. 0.02% of the amount by which AUM exceeds EUR 250 million, capped at a total of EUR 10 million of own funds (initial capital plus add-on).
3. Fixed-overheads floor. Own funds must never fall below one quarter of the previous year's fixed overheads. This floor binds young AIFMs and UCITS ManCos where the AUM-based add-on is still small.

Additional professional indemnity insurance or additional own funds of 0.01% of AUM are also required to cover professional-liability risks. The AIFM can pick whether to hold the cover as extra capital or as insurance.

Own funds must be invested in liquid assets or short-term readily convertible assets, and must not include speculative positions. UCITS ManCos are held to a slightly stricter standard.

Governance, substance and delegation

AIFMD and UCITS are as much about operational substance as about capital. Supervisors expect the manager to exercise real control over core functions, not park them with a third party.

• Management body. At least two senior managers (the "four-eyes principle"), collective suitability across investment management, risk management, compliance and legal.
• Local substance. At least two full-time executive directors resident in the home Member State, plus local portfolio management, risk and compliance staff. AIFMD 2.0 codifies this: letter-box ManCos are no longer tolerated.
• Core functions. Portfolio management and risk management must be functionally separated. Neither can be delegated in full; only parts can be delegated to regulated third parties.
• Delegation oversight. Any delegation of portfolio management to a third party requires the delegate to be authorised or registered for asset management in its home state, and the AIFM or ManCo must monitor and keep ultimate responsibility.
• Remuneration policy. AIFMD Annex II and UCITS V remuneration rules: deferred variable pay (minimum 40% for identified staff), share-based settlement (minimum 50%), malus and clawback, gender-neutral policy, risk alignment.

AIFMD 2.0 tightens delegation disclosure and requires the AIFM to explain in its authorisation file how substance is retained when core activities are delegated. Expect supervisors (especially ESMA peer review) to scrutinise this closely.

The depositary: the silent co-regulator

Every AIF (for full AIFMs) and every UCITS must appoint a depositary authorised under AIFMD or UCITS and located in the fund's home state. The depositary is a separate entity (usually a custodian bank) that:

• Safe-keeps the fund's financial instruments in custody.
• Verifies ownership and records other assets (real estate, private companies, loans).
• Monitors cash flows and reconciles them against fund records.
• Oversees and verifies compliance with the fund's prospectus and investment rules.
• Is strictly liable for the loss of financial instruments held in custody unless it proves the loss resulted from a permitted external event.

Depositary fees run 1 to 5 basis points of NAV per year for UCITS and 2 to 10 basis points for AIFs depending on complexity. A depositary agreement takes 3 to 6 months to negotiate; start the conversation early in the authorisation process.

AIFMD 2.0 introduces a limited depositary passport, allowing a depositary authorised in one Member State to service AIFs in another Member State under specific conditions, which is particularly useful for jurisdictions with thin depositary markets.

Authorisation process and timelines

NCAs follow the EBA and ESMA authorisation guidelines under AIFMD and UCITS. The file runs to 500 to 1,500 pages for a full AIFM.

1. Programme of activity. Fund types, asset classes, target investors, geographies, marketing strategy, risk profile.
2. Three-year business plan. Projections for AUM, revenue, costs, profits, capital. Stress scenarios.
3. Governance and organisation. Organisational structure, board, management body, committees, local substance demonstration.
4. Risk and compliance framework. Risk-management policy per asset class, investment limits, leverage limits, liquidity-management tools (critical under AIFMD 2.0), compliance monitoring programme.
5. Valuation policy. Who values, how often, independence, fair-value methodology.
6. ICT, cybersecurity, DORA. Architecture, data, resilience testing. DORA applies in full from 17 January 2025.
7. Delegation arrangements. Full list of delegated activities, delegate due-diligence, oversight arrangements, substance retained at the AIFM level.
8. Fit-and-proper. Management body, key function holders, qualifying shareholders.

Statutory clock: 3 months from a complete file, extendable to 6. In practice, Luxembourg CSSF runs 4 to 9 months for AIFMs and 6 to 12 for UCITS ManCos; Ireland 6 to 12 months; Malta 4 to 9; France 9 to 15; Netherlands 6 to 12.

Passports and cross-border marketing

AIFMD provides two passports for full AIFMs.

• Management passport. A home-authorised AIFM can manage AIFs domiciled in other Member States through freedom of services or freedom of establishment.
• Marketing passport. An AIFM can market EU AIFs to professional investors across the EEA by notification. Retail marketing requires additional host-state approval.

UCITS has a built-in marketing passport for retail distribution across the EEA through the prospectus-notification process under Article 93 of the UCITS Directive.

Cross-border marketing directive 2019/1160 harmonised pre-marketing and denotification rules, with ESMA coordinating Q&A. Pre-marketing is now permitted for AIFMs under specific conditions, making fund launches more efficient.

Popular AIFM and UCITS jurisdictions in 2026

What AIFMD 2.0 and UCITS VI actually change in 2026

Directive (EU) 2024/927 modernises both regimes. Key changes active from 16 April 2026:

1. Loan-originating AIFs. Harmonised framework for AIFs that originate loans: leverage caps, diversification, notional-exposure limits. Ends the patchwork of national private-credit rules.
2. Liquidity management tools. Mandatory set of at least two tools (swing pricing, redemption gates, anti-dilution levy, redemption in kind, side pockets) for open-ended AIFs and UCITS. Activation disclosed to the NCA.
3. Delegation substance. Tighter rules on what can be delegated outside the EU, more granular authorisation-file disclosure, ESMA peer review of national supervisors.
4. Depositary passport. Limited depositary passport to ease capacity constraints in smaller markets.
5. Reporting upgrade. Streamlined AIFMD Annex IV reporting (active from 16 April 2027) with additional data points on loans, ESG and liquidity-management-tool usage.
6. Marketing transparency. Clearer rules on pre-marketing, fund names and ESG-related disclosures under the interplay with SFDR.

New authorisation files from 2026 onwards must already reflect AIFMD 2.0 and UCITS VI expectations, even where national transposition is still pending. Supervisors are using the authorisation gate to enforce early alignment.

Ship an asset-management product with Crassula

An AIFM or UCITS ManCo licence is the legal layer. The operational layer is the front, middle and back office: investor portal, onboarding, AML and suitability, order management, NAV calculation or oversight, risk monitoring, depositary reconciliation, transfer-agency integration and regulatory reporting. Crassula provides the operational core as a composable platform, configurable for both open-ended and closed-ended fund operating models.

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