Document Type


Publication Date



Hedge funds, Alternative Investment Fund Managers Directive


Banking and Finance Law


This article examines the mechanics of the recently adopted EU Alternative Investment Fund Managers Directive. On balance, the results of this examination are not encouraging. The EU has failed to mount a persuasive case for why the Directive represents an improvement over existing national regulatory regimes or prevailing market practices in several key areas. Furthermore, by attempting to shoehorn an economically, strategically and operationally diverse population of financial institutions into a single, artificial class of regulated actors, the EU has established what is in many respects a conceptually muddled regulatory regime. Most importantly, however, the Directive's approach toward the amelioration of the potential systemic risks associated with alternative investment funds manifests an inherent and ultimately fatal structural flaw. This flaw punctuates the necessity of a globally co-ordinated response toward macro-prudential risks arising within a globally integrated financial system.


This article predates the author's affiliation with Cornell Law School.