Guidelines on key concepts of the AIFMD - Esma - Europa

Q7: Do you agree with the details provided above on the notion of raising capital? If not,please provide explanations and an alternative solution.98. A large number of respondents agreed with the details provided.99. In particular, two asset managers associations supported the statement according to which the absenceof capital raising is not conclusive evidence that an entity is not an AIF and mentioned that situationswhere an AIFM is approached by an investor/group of investors with a specific concept for the AIFset-up should by no means be relevant for the question whether or not an entity qualifies as AIF.100. A couple of respondents mentioned that fund structures with more than one level should remainoutside the AIF definition, as long as the entity on the lower level does not acquire new capital, but onlystructured through the investment strategy of the upper entity (e.g. in case of an affiliated company(SPV) used for tax reasons, the latter does not collect capital and therefore does not raise capital,which was in turn acquired by the parent entity (AIF)).101. An asset managers association argued that the concept of capital raising should be understood in thecontext of what constitutes marketing under the AIFMD and, for instance, two commercial companiesestablishing a joint venture vehicle in order to develop an investment strategy would not be regardedas raising capital although the creation of such joint venture vehicle necessarily entails some kind ofcommunication by way of business.102. An investment managers association mentioned that the language in paragraph 26 of the DP is rigidand could have the unintended consequence of capturing transactions which are not capital raising.This respondent also suggested referring to the absence of “direct” capital raising in paragraph 27 ofthe DP in relation with the conclusive evidence that an entity is not an AIF.103. A respondent suggested that a key factor for the notion of raising capital is that capital is raised fromexternal, or unconnected sources, for investment in accordance with a defined investment policy.104. An association of pension funds considered important to establish what should be qualified as ‘externalcapital’ and mentioned that this should not include the case where parties agree to deposit funds orassets by means of a mutual business agreement without inviting a larger group of (potential) participantsto that effect without knowing upfront who will in the end participate.105. A couple of respondents recommended not to set aside the raising of capital (as the language in paragraph27 of the DP may imply) since this is one of the few clear elements to define an AIF.106. A private equity association mentioned that an additional criterion to assess the absence of fundraising could be the absence of any material drafted for placement or distribution purposes (e.g. offeringmemorandum, prospectus or issuing document).Q8: Do you consider that any co-investment of the manager should be taken into accountwhen determining whether or not an entity raises capital from a number ofinvestors?41