AIFMD II and Italian Credit AIFs: What changes for lending into Italy

Overview

On 27 March 2026, Italy published the implementing decree (D.Lgs. 13 March 2026, No. 39) transposing Directive (EU) 2024/927 (AIFMD II) into national law. The new rules apply from 16 April 2026, and the Bank of Italy and Consob must adopt secondary implementing measures by 16 October 2026. To this end, the Bank of Italy launched a market consultation on 27 May 2026, which closed on 11 July 2026.

For sponsors, investors and asset managers active in Italian private credit, the reform marks a pivotal moment: Italy’s existing credit AIF regime must now be reconciled with the new EU-wide framework for loan-originating AIFs, bringing both opportunities and new structuring constraints.

The key message for the market is practical: AIFMD II should make lending into Italy more accessible and more consistent across EU structures, but it will also require more disciplined fund design, robust credit processes, and careful transaction-level analysis – particularly for credit funds financing Italian borrowers established as Italian real estate AIFs.

In depth

Why it matters for Italian lending: A broader definition of credit AIFs

AIFMD II introduces a harmonised definition of “loan-originating AIF” – a fund whose investment strategy mainly consists of originating loans, or whose originated loans represent at least 50% of its net asset value. The definition captures both direct lending and indirect origination through third parties or SPVs, where the AIFM or the AIF is involved in structuring the loan.

The Italian implementing decree transposes the EU definition of “loan-originating AIF” through the domestic category of “FIA di credito” (“credit AIF”), opting, however, for a broader notion of “loan origination”, which, in line with the regulatory framework already in force in Italy before the AIFMD2, encompasses both direct lending and credit acquisition (including purchases of receivables for consideration on the secondary market). For sponsors, this means that structures aimed at Italian credit exposure should be assessed by reference to the substance of the investment strategy, not only the legal form of the lending chain. It also means that the Italian regulatory perimeter for AIFs that originate loans may be wider than the EU minimum.

Easier access for EU credit AIFs lending into Italy

A central benefit of the reform is the simplification of cross-border lending by EU credit AIFs into Italy. Under the previous framework, EU AIFs intending to lend in Italy were required to file a prior notification with the Bank of Italy demonstrating that their structure was “analogous” to Italian credit AIFs – a requirement that, in practice, functioned as a prior approval process and created significant uncertainty for foreign operators.

The implementing decree replaces this filter with an information/notification regime: EU AIFMs are now required only to inform the Bank of Italy when their managed AIFs begin lending operations in Italy, without any prior approval or structural compatibility test.

This is a positive development for funds seeking exposure to Italian borrowers in the context of corporates, acquisitions, real estate transactions and other Italian financing structures. However, AIFMD II does not create a standalone “lending passport” for AIFs: the passporting rights remain with the AIFM, not the fund itself. Sponsors should still carefully assess the regulatory perimeter, borrower classification, marketing arrangements, consumer-credit rules where applicable, and any residual Italian-law constraints that may affect the transaction.

Concentration limits: A key structuring issue for real estate lending

AIFMD II imposes a 20% concentration limit on loans by any AIF to financial-sector borrowers – including credit institutions, investment firms, insurance undertakings, UCITS and other AIFs. The limit is calculated by reference to the “capital of the AIF”, defined as the aggregate capital contributions and uncalled capital committed to the AIF, calculated on the basis of amounts investible after the deduction of all fees, charges and expenses that are directly or indirectly borne by investors. Notably, this limit is not expressly transposed in the implementing decree, but is reflected in the Bank of Italy’s draft of secondary regulations published as part of the market consultation referred to above.

The application of this limit to Italian real estate lending may be particularly sensitive. In many Italian real estate finance transactions, the borrower is not an ordinary corporate SPV but an Italian real estate AIF which, as an AIF, generally falls within the category of financial-sector borrowers for concentration purposes. As a result, the 20% limit may materially affect single-asset financings, development financings, refinancing transactions and other structures where a credit AIF lends to an Italian real estate fund vehicle.

Sponsors and investors should focus early on borrower identity, the basis for calculating “capital”, whether the limit applies on a direct-borrower or look-through basis, and whether financing can be structured consistently with the final implementing rules.

Leverage, liquidity and fund design

AIFMD II further introduces harmonised leverage limits for loan-originating AIFs: 175% for open-ended funds and 300% for closed-ended funds, calculated under the commitment method. For Italy, this represents a meaningful change: the previous domestic regime applied a uniform 150% limit for reserved credit AIFs, and the new differentiated thresholds — particularly the 300% limit for closed-ended funds — offer greater structuring flexibility for subscription lines, asset-level leverage, bridge financing and other financing arrangements.

Loan-originating AIFs are generally expected to be closed-ended, reflecting the illiquid nature of loan portfolios. However, the Italian decree now permits open-ended credit AIFs – a notable shift from the previous regime, which allowed only closed-ended structures. Open-ended credit AIFs will be possible where the AIFM demonstrates to the Bank of Italy that the liquidity risk management system is compatible with the investment strategy and redemption policy, and where at least two liquidity management tools from the AIFMD II catalogue are activated. For Italian lending strategies, fund form, redemption mechanics, liquidity tools, notice periods and cash-flow modelling should be treated as core structuring considerations from the outset.

Risk retention and originate-to-distribute prohibition

AIFMD II prohibits pure “originate-to-distribute” strategies and requires an AIF that has originated a loan and wishes to subsequently transfer it to third parties to retain at least 5% of the notional value of that loan. The retention obligation applies until maturity for loans with a term of up to eight years (and for all consumer loans regardless of maturity), and for at least eight years for other loans. Exceptions apply in certain cases, including fund liquidation, implementation of investment strategy in investors’ best interest, and credit deterioration of the borrower.

For Italian loan portfolios, the practical impact will be felt across syndication, loan sales, portfolio rotation and exit planning. Managers launching new Italian credit strategies should ensure that investment committee processes, credit policies, monitoring systems and fund documentation are designed to support compliance from the outset.

What sponsors and investors should focus on

For new Italian credit strategies, the key questions are whether the fund is a loan-originating AIF or otherwise within the Italian credit AIF framework, whether the lending chain involves SPVs or indirect origination, whether the borrower is a corporate, consumer, real estate AIF or other financial-sector entity, and whether leverage, concentration and liquidity rules affect the business plan. The concentration analysis should be run before term sheet stage where the borrower is, or may be treated as, a financial-sector entity, because the 20 percent limit may affect ticket size, club-deal strategy, parallel lending structures and the allocation of exposure across funds.

AIFMD II should make the market more investable for well-structured platforms and it will reward sponsors that combine execution capability with careful regulatory design.

We are actively monitoring the Italian implementing framework, including the Bank of Italy consultation on the secondary regulation. We are also participating in industry discussions and working groups and are engaging with sponsors, investors and market participants on the practical implications for credit AIFs investing in Italy, with particular focus on lending to Italian borrowers and real estate lending transactions involving Italian real estate AIFs. In this context, we are also assessing whether the final secondary measures, or the outcome of the consultation process with the Bank of Italy, may provide useful guidance on the application of the 20% concentration limit to Italian real estate AIF borrowers whose activity is limited to holding and managing the relevant real estate assets, and whether there may be room for a more tailored approach in such cases.