For alternative investment funds (AIFs), new liquidity management rules will apply from 16 April 2026. The EU wants to curb the risk of large waves of returns in a short period of time (so-called fund runs). These are requirements of the AIFM II Directive (Directive (EU) 2024/927), which will come into force nationally on 16 April 2026 with the Fund Risk Limitation Act (FRiG). These affect, among other things, all German open-ended real estate mutual funds as well as open-ended real estate special funds. In concrete terms, this means that a fund manager (AIFM) must select at least two liquidity instruments for each open-ended AIF. What is new is the degree of formalization: There is an obligation to implement liquidity management tools and to draw up a liquidity management plan. The rules have formally been in force since April 2024, but must be implemented by April 16, 2026.
Ulrich Creydt, Managing Director of Ypsilon GmbH Steuerberatungsgesellschaft, comments: "The changes have an impact primarily on open-ended real estate mutual funds, but also on special funds. In principle, German funds are well prepared, as there are already comprehensive national rules in the Capital Investment Code, especially for mutual funds. These include minimum holding periods, notice periods, minimum liquidity ratios, etc."
Select at least two liquidity management tools mandatory.
What is new now is that two tools must be selected. There are also new tools that were previously rather unusual for real estate funds. One example is so-called dual pricing, which provides for two prices instead of one net asset value. "For example, there is a redemption price that is lower and an issue price that is higher. Depending on the situation – for example in the event of high returns or high inflows – prices can be adjusted. Dual pricing is typically not dynamic within one day, but is determined per valuation day," Creydt explains.
Rules will be activated in 2027 via a Level 2 regulation.
As is often the case with EU directives, there is a multi-stage entry into force. In principle, the rules must be applied from 16 April 2026. But as with previous regulations, there are technical standards that do not have to be applied until one year later – namely in 2027 – via a Level 2 regulation. "The standards then regulate which parameters are permissible in the liquidity management tools and how they must be calibrated," explains Creydt. "To put it simply, you can say that the new regime will start in 2026, but after a 12-month transition period, it will be sharpened above the technical standards on April 16, 2027."
