The French Financial Markets Authority (Autorité des Marchés Financiers (“AMF”)) recently revised its policy on the marketing of alternative investment funds (“AIF”) in and into France. The revised policy now allows for the “pre-marketing” of AIFs in France in certain circumstances.
The relaxation of the previous policy arose in the context of a working group supervised by the AMF which aims to propose improvements to the financial competitiveness of France within the European Union. Accordingly, the AMF now considers that the following shall not be deemed as being marketing within the meaning of the Alternative Investment Fund Managers Directive:
- management companies or third parties acting on their behalf may meet a maximum of 50 investors in order to evaluate their appetite before launching an AIF when:
- the investors are (i) professional investors or (ii) non-professional investors whose initial subscription is equal or greater than €100,000; and
- the meeting is not followed by the provision of a subscription agreement and/or documentation providing definitive information on the characteristics of the fund allowing these investors to subscribe or to undertake to subscribe fund interests;
- the purchase, sale or subscription of:
- fund interests by executives, directors, managers or employees of the management company in the context of the remuneration policy of the management company;
- fund interests by the investment team and the executives of the management company or the management company itself;
- carried interest;
- the transfer of interests between investors (secondary transaction) to the extent the transfer is not managed by the management company or by a third party acting on behalf of it;
- the attendance by the management company to conferences or the organisation of investor meetings for the purposes of providing information on the activities of the management company (management team, strategy, funds closed to subscription and other general communication) and market trends when:
- these conferences or meetings are solely authorised for professional investors; and
- there is neither solicitation for investing in a specific AIF nor communication relating to an AIF which is open for subscription;
- the response by the management company to a request by a professional investor for the set-up of an AIF.
Pre-marketing within the meaning of the AMF policy may therefore allow management companies to contact a maximum of 50 investors fulfilling the above criteria by providing a fact sheet, a slide presentation or a draft limited partnership agreement or a draft private placement memorandum to the extent the investors may not subscribe for interests in the relevant AIF or undertake to subscribe for such interests.
This new approach will benefit not just managers of AIFs wishing to gauge interest from investors in France without first having to comply with the necessary regulatory formalities but also French investors looking to obtain information at an early stage of the fund raising process.