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The Central Bank of Ireland (CBI) reissued its AIF rulebook on 5 May 2026, removing the prohibition on Irish Qualifying Investor Alternative Investment Funds (QIAIFs) acting as guarantors to third parties. The revised AIF Rulebook unlocks standard fund finance security structures for subscription line, NAV and hybrid fund finance facilities that were previously restricted in QIAIFs.
What has changed?
Previously, a QIAIF could not guarantee or secure the obligations of any third party, including any portfolio company, subsidiary, other funds or other third party unless it fell within narrow exceptions.
A workaround of ‘cascading’ security was adopted by the Irish fund finance market whereby an Irish feeder fund would grant security to its master fund to cover its own obligations. This security interest would in turn be repackaged by the relevant master fund and assigned to the lender. This multi-step cascading structure was clunky and rarely favoured by lenders. This forced sponsors to use offshore SPVs or parallel structures to achieve what is market-standard in Luxembourg, Delaware, and Cayman Islands fund finance deals.
The revised AIF Rulebook deletes in full restrictions on QIAIFs providing security or acting as guarantors to third parties.
Why this matters for fund managers and lenders
This update has a number of advantages for fund manager and lender clients:
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Access to Finance: QIAIFs can now provide direct guarantees or security to lenders for subscription line, NAV and hybrid facilities without restructuring. This allows Irish funds and their respective group and co-investment structures to access new finance options.
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Cleaner security packages: Lenders to QIAIFs or their related funds can now take direct guarantees and security from the QIAIF. This removes the need for complex cascading security structures.
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Level playing field: The deletion of the QIAIF security restriction aligns Ireland with security structures available to lenders in other jurisdictions.
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Faster execution: No need to structure around the security prohibition. Documentation can follow LMA-style fund finance terms used for Luxembourg or Cayman Islands domiciled funds, without layering in cascading security as a workaround.
Context: Part of a broader overhaul
The security prohibition removal is one of a number of changes made to the existing Irish alternative investment fund regulatory regime to support the growth of Irish private asset funds. Further information on these changes is available in our separate publication on the revised AIF Rulebook.
What should you do now?
For fund managers:
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Review existing QIAIF documentation. In order to avail of the flexibility afforded under the revised AIF Rulebook, fund constitutional documents and offering documentation should be reviewed and updated to permit the granting of guarantees and security to third parties in accordance with the QIAIF’s investment policy and leverage limits.
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For new launches, QIAIFs are immediately viable for strategies requiring fund-level guarantees and security without parallel vehicles.
For lenders:
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Update credit documentation templates. Direct QIAIF guarantees and security are now permissible, subject to the relevant QIAIF’s investment policy and leverage limits. Cascading security structures are no longer required as a substitute.
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Revisit deals where Ireland was discounted due to guarantor restrictions. The QIAIF is now competitive with other jurisdictions for fund finance.
Conclusion
This is a material improvement for asset managers and lenders using Ireland for fund finance transactions. The ability for QIAIFs to guarantee and secure third-party obligations removes a key structuring friction and brings Ireland in line with market-standard security practice.
Further information on these changes is available in our separate publication on the revised AIF Rulebook.
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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