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The changes will relax current restrictions and allow L-QIAIFs to make debt and equity investments linked to the loan origination strategy, a policy which reflects market demand and provisions in the ELTIF product.
This change will increase the attractiveness of the Irish L-QIAIF regime to international fund managers, as they will be allowed to make equity investments in target companies a fund has made a loan to. In addition, debt and equity securities may be held for treasury, cash management or hedging purposes.
The changes to the L-QIAIF requirements will take effect from 3 January when the revised Rulebook is published. Previously, L-QIAIFs have been prohibited from engaging in activities other than lending and directly related operations.
Pat Lardner (pictured), chief executive at Irish Funds, says: “This is good news for the industry and will further enable market-based financing of economies across Europe. It is an example of an area which we have advocated on behalf of our members and the relaxation of the current restrictions are a welcome and timely change to the L-QIAIF product. This change is a significant enhancement to Ireland’s regulated fund product range and will encourage more international fund managers to do business here.”