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What You Need to Know
On 5 May 2026, the Central Bank of Ireland (“CBI”) published a revised AIF Rulebook1 which comprehensively updates and enhances Ireland’s regulatory framework for alternative investment funds (“AIFs”). This coincides with the implementation of AIFMD 2.0 into Irish law on 1 May 20262.
We wrote recently on the changes as they affect the private funds market generally. This update focuses on the positive changes for fund finance specifically; the new regime introduces welcome flexibility and streamlined requirements to support the continued growth of Ireland as a domicile for private funds.
Removal of the Restriction on Third-Party Guarantees
One of the key enhancements confirmed in the finalised rules is the ability of QIAIFs to provide guarantees for third party obligations and to support financing arrangements beyond their own assets.
Under the previous AIF Rulebook, QIAIFs were prohibited from giving guarantees or providing security for the obligations of any third party, other than their wholly-owned subsidiaries, except in certain circumstances where a QIAIF had an economic interest in the borrower. This meant, for example, that in subscription line transactions where an Irish fund, as a feeder fund into an intermediate fund or the main fund, was required to provide security or a guarantee to a lender, a cascading security structure had to be used. The cascading structure allowed the Irish fund to provide security for its own direct obligations to the intermediate fund/main fund, with the right to that security then assigned down the chain to the lender or to the security agent.
The removal of this restriction enables more efficient cross-entity and group arrangements in line with international fund finance structures, where guarantees and cross-collateralisation across fund groups are commonplace.
It will now be more straightforward for fund managers to put in place financing arrangements within fund groups, including those involving multiple layers of financing across different vehicles (for example, by having a QIAIF guarantee borrowings incurred at the level of a direct or indirect master fund, an intermediate or aggregator vehicle or parallel fund).
Effective Date
The updated AIF Rulebook is effective immediately and new financing arrangements or existing arrangements being re-negotiated can now avail of the greater flexibility.
Further Information
These fund financing enhancements represent one of the key reforms that will help to ensure that Ireland remains an attractive and competitive jurisdiction for AIF sponsors and investors by aligning Irish arrangements with international fund finance market practice.
Footnotes
2. Implementation of AIFMD 2.0 was effected pursuant to an Irish statutory instrument which commenced (took effect) on 01 May 2026 https://www.irishstatutebook.ie/eli/2026/si/181/made/en/print
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
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