The Austrian Federal Ministry of Finance published its ministerial draft implementing AIFMD II in January 2026 [20]. The implementation deadline is April 16, 2026, and this is the most significant change to the AIFMG since it was first enacted. If you are launching a fund in Austria this year, or running one already, you need to understand what is changing and how it affects your structure.
I have been working through the draft with our legal partners and our existing fund clients. The two areas that matter most for emerging managers are the new loan origination framework and the mandatory liquidity management tools. Both introduce real constraints on how you structure investments and manage redemptions. But they also bring clarity where there was ambiguity, and that is worth something.
The loan origination framework
Until now, Austria had no harmonized rules for AIFs that originate loans. Some managers operated in a grey area, structuring loan-like instruments under general AIFMG provisions without specific regulatory guidance. AIFMD II changes that entirely by creating a defined framework under Directive (EU) 2024/927 [20].
The key rules for loan-originating AIFs are:
- Single-borrower concentration limit of 20%. No single borrower can represent more than 20% of your fund's NAV at origination. This prevents over-concentration but requires active portfolio management from the first deployment [20].
- Leverage caps. Open-ended loan-originating funds are capped at 175% leverage (assets to NAV). Closed-ended funds get more room at 300% [20]. For a first-time credit fund, the open-ended cap is tight and effectively pushes most emerging managers toward closed-ended structures.
- Risk retention on loan sales. If you sell originated loans on the secondary market, you must retain 5% of the notional value on your books [20]. This skin-in-the-game requirement mirrors securitization rules and prevents originate-to-distribute models that transfer all risk.
- Lending to related parties is prohibited. You cannot lend to your fund manager, its staff, the depositary, or a delegate. The regulation draws a bright line here.
For venture capital and private equity managers, these rules may seem tangential. But many VC funds include convertible note programmes, bridge loans to portfolio companies, or venture debt allocations. If these represent a material portion of your strategy, the concentration limit and leverage caps now apply to you.
Mandatory liquidity management tools
This is the change that affects every open-ended AIF manager in Austria, regardless of strategy. The FMA has published guidance explaining the new requirements [43], and the core obligation is straightforward: all open-ended AIFs must select and implement at least two liquidity management tools (LMTs) from a standardized list.
The available tools include:
- Swing pricing: adjusting the NAV to pass transaction costs to redeeming or subscribing investors rather than the fund as a whole.
- Redemption gates: limiting the proportion of the fund that can be redeemed in any single period.
- Notice period extensions: requiring investors to give advance notice before redeeming.
- Side pockets: segregating illiquid assets so that liquid positions can continue to be redeemed normally.
- Anti-dilution levies: charging redeeming investors a fee to cover transaction costs.
You must select at least two of these, calibrate them to your fund's specific liquidity profile, and document the circumstances under which each tool will be activated [43][20]. The FMA expects this to be a considered decision, not a box-ticking exercise. Your fund documents (the PPM, partnership agreement, or prospectus) need to describe the selected tools and their activation triggers clearly enough that investors understand them before committing capital.
Calibrating the tools: not a formality
Selecting two tools from the list is the easy part. The harder work is calibration: defining the specific thresholds, triggers, and parameters for each tool. For swing pricing, you need to determine the swing factor and the conditions under which it applies. For redemption gates, you need to set the percentage cap and the notice provisions. The FMA has made clear that generic language will not suffice; they want fund-specific analysis tied to the actual liquidity profile of your portfolio [43].
For an open-ended fund investing primarily in illiquid assets (private equity secondaries, for example), the calibration needs to reflect the real liquidity mismatch between assets and liabilities. A fund investing in listed securities with daily pricing has a different calibration challenge. Match your tools to your actual risk, not to a template.
What this means for closed-ended funds
If you run a closed-ended venture capital or private equity fund with no redemption mechanism, the liquidity management tool requirement does not apply in the same way. But you are not off the hook entirely. The AIFMD II amendments also require all AIFMs to have adequate liquidity management processes, including stress testing, that are appropriate to their fund's structure [20]. For a closed-ended fund, this means documenting how you manage capital calls, distributions, and any secondary transfer provisions.
Delegation transparency
AIFMD II introduces new disclosure requirements around delegation arrangements. If you delegate portfolio management, risk management, or other functions to third parties, the FMA will now require enhanced transparency about those arrangements, including reporting through ESMA's centralized delegation database [20].
For emerging managers who rely on external service providers (and most do), this means you need clear, documented delegation agreements that specify the scope of delegated functions, the oversight mechanisms you maintain, and the rationale for delegation. The days of informal arrangements with portfolio advisors or sub-managers are over.
Grandfathering: who gets transition time
The treatment of existing and new funds differs in an important way. AIFs established before April 15, 2024, benefit from grandfathering provisions and have until April 16, 2029, to comply with the new rules [20]. That is five years of transition time.
New funds launched after that date (which includes anything an emerging manager is setting up now) must comply immediately from April 16, 2026. There is no grace period. If you are in the process of structuring a fund that will launch in Q2 or Q3 2026, the AIFMD II rules need to be baked into your fund documents from day one.
I have seen managers treat grandfathering as an excuse to delay. That is a mistake. Even if your existing fund qualifies, investors and placement agents are already asking about AIFMD II compliance. Being ahead of the curve signals operational maturity.
Practical steps for emerging managers
Based on what I have seen in the draft and the FMA's published guidance, here is what I would prioritize:
- Review your fund documents. If you are launching in 2026, your LPA or fund rules must reference the selected liquidity management tools (for open-ended structures) and comply with the loan origination limits (if applicable). Do not wait until after first close to make these changes.
- Assess your strategy against the concentration limit. If your fund includes any form of direct lending, including bridge loans to portfolio companies, model how the 20% single-borrower cap affects your deployment plan.
- Document your delegation arrangements. If you delegate portfolio management, compliance, or valuation functions, ensure you have written agreements that meet the enhanced transparency standards.
- Update your risk management framework. The FMA will expect liquidity stress testing documentation even for closed-ended funds. Build this into your operational setup rather than retrofitting it later.
- Talk to your depositary. Depositaries are also adjusting their processes for AIFMD II. Coordinate early on reporting formats and timeline expectations.
Enhanced reporting obligations
AIFMD II also amends the Annex IV reporting framework. Fully licensed AIFMs will face expanded reporting fields, including more granular data on delegation arrangements, loan origination exposures, and the use of liquidity management tools. The FMA has signaled that it will align its reporting templates with ESMA's updated technical standards once finalized [20].
For managers who are currently registered (sub-threshold) and not subject to Annex IV reporting, the direct impact is smaller. But if you are planning to upgrade to full licensing, or if you cross the AUM thresholds during your fund's life, be aware that the reporting you will eventually face is heavier than what existed under AIFMD I.
Even for registered managers, the annual reporting obligation now includes information about any loan origination activity and the liquidity management tools in place for any open-ended structures. The FMA wants a fuller picture of the Austrian fund market, and AIFMD II gives them the tools to get it.
The bigger picture
AIFMD II applies across the entire EU. Every member state is implementing the same directive by April 2026. The harmonization of loan origination rules and liquidity management standards means that an Austrian AIFM will operate under essentially the same framework as a German or Luxembourg manager. For emerging managers who want to raise capital across borders, that consistency is valuable.
Austria's implementation follows the directive closely, without major gold-plating [20]. That is good news. It means the rules are predictable, and advice from EU-wide legal counsel will translate directly to the Austrian context.
How Infra One helps with AIFMD II compliance
We are updating our fund administration platform and reporting templates to reflect the AIFMD II requirements. For managers launching new funds, we build the liquidity management tool framework into the operational setup from the start, including the documentation, calibration methodology, and activation procedures the FMA expects. For managers with existing funds, we help assess the grandfathering timeline and plan the transition.
Our fund services cover the full reporting chain, including the enhanced delegation disclosures and the Annex IV amendments that AIFMD II introduces. If you are working through how these changes affect your fund, reach out to our team.
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