Newsletter-21

245 CAPITAL MARKETS LAW In contrast to the UCITS, the term “ alternative investment funds ” (“AIF”) corresponds to all investment funds that are not already cov- ered by the UCITS Directive. This includes hedge funds, funds of hedge funds, venture capital, and private equity funds and real estate funds. Overview of the Concept of Private Equity as a Type of Alternative Investment “ Private equity ” could be broadly defined as investment in equity securities in unquoted companies, i.e. companies that are not listed in public stock exchanges (Yates & Hinchliffe, pp. 2). On the other hand, if we look at the term “ private equity firm, ” it is an investment manager that raises a pool of capital, such as pension funds, funds of funds and wealthy individuals which is typically in the form of private equity funds, to invest (Yates & Hinchliffe, pp. 8-10). “ Private equity investors ” are typically institutions or individuals in the form of private equity firms operated by investment professionals or business angels. Overview of Directive on Alternative Investment Fund Managers Overview of the Concept of Alternative Fund Managers As expressed before, AIF refers to investments other than the tra- ditional investments in stocks, bonds, cash or real estate, but rather to investment funds that are not already covered by the UCITS Directive. The management of such AIFs is regulated by the EU directive titled Alternative Investment Fund Managers Directive (“AIFMD” or “Di- rective”) numbered 2011/61/EU and dated 8 June 2011. Alternative Investment Fund Managers (“AIFMs”) are EU fund managers that manage AIFs, such as hedge funds and private equity funds, irrespec- tive of whether the funds are EU or non EU AIFs, and managers that manage EU AIFs or market one or more AIFs in the EU, regardless of whether such AIFs are EU AIFs or non-EU AIFs. The AIFMD’s regime applies to all such managers so long as they manage such funds