It’s a recognized legal principle. It is “right” no fund or asset manager is going to shop around the world for 193 licenses, he is going to have a lawyer in every jurisdiction. If this is doing it wrong then 25% of funds allocated by Europeans are with “wrong” and not “right” asset managers. Europe is free to over-regulate, we are also free to open up businesses in jurisdictions that make sense.
No fund manager: whether based in Cayman, Singapore, Switzerland, or the U.S. obtains 193 licenses for every country where an investor resides. That’s not how the global asset management industry operates.
Instead, fund managers operate under their own national legal frameworks and apply internationally recognised compliance processes such as reverse solicitation and national private placement regimes (NPPRs), which exist for precisely this purpose.
The European legal framework recognises this reality. Reverse solicitation provisions under AIFMD (Recital 70), MiFID II (Article 42), and MiCA (Article 61) are clear. They allow third-country firms to accept investments from EU-based investors provided the relationship is initiated exclusively by the investor, without marketing or solicitation from the manager.
The vast majority of non-EU hedge funds, private equity funds, and alternative asset managers rely on this well-defined framework to operate legally and compliantly while continuing to attract investors from Europe. If the regulatory expectation were that every non-EU fund must be authorised in every EU member state where a potential investor resides, global capital markets would not function as they do today.
European investors, including institutional investors and family offices, have long allocated capital globally. As Preqin data shows, EU investors account for 20% to 25% of capital committed to offshore hedge funds, much of which is structured through reverse solicitation frameworks.
