Italy’s AIF lending liberalisation divides

Author: Lizzie Meager | Published: 11 Mar 2016

The market is unsure of the potential effectiveness of Italy’s long-awaited new direct lending regime for alternative investment funds (AIFs).

Under the new rules, EU-domiciled AIFs may, subject to certain conditions, lend directly to Italian borrowers. These funds must pre-register with the central bank, and will be subject to the same transparency obligations applicable to banks and financial intermediaries.

"People have been talking about this for a long time, and I think the reality is it fell short of expectations," said Giuseppe de Palma, managing partner for Italy at Clifford Chance. "I think they were hoping for something more courageous."

Approaches to direct lending by AIFs vary wildly across Europe. While the UK government is keen to promote the activity and its somewhat liberal regime reflects this, attitudes are entirely different throughout much of continental Europe where the lending environment remains heavily dominated by banks.

The Alternative Investment Fund...