Loan originating Qualifying Investor AIFs (“L-QIAIFs”) will be allowed to engage in broader credit focussed strategies from 7 March 2018, according to a recent announcement published by the Central Bank of Ireland (“CBI”).
Currently, under the so-called “ limited purpose rule”, an L-QIAIF is only allowed to invest in the debt and equity securities of entities or groups to which it lends. On 7 February 2018, the CBI published a Notice of Intention for a rule change to the AIF Rulebook (here) in which it signals its intention to substantially relax this limited purpose rule in order to allow an L-QIAIF invest in any type of debt or credit instrument. As a result, once this rule change applies, an L-QIAIF will be able to invest in a broad range of fixed income and credit securities as part of its overall investment strategy, including debt/credit instruments of entities or groups to which the L-QIAIF does not lend. This is a very welcome development, which is likely to lead to increased interest in Irish L-QIAIFs.