{"id":1430,"date":"2025-05-08T09:45:06","date_gmt":"2025-05-08T09:45:06","guid":{"rendered":"https:\/\/iqeq.com\/gb\/insights\/laying-the-groundwork-how-emerging-managers-can-pre-market-a-strategy-in-europe-without-setting-up-a-fund\/"},"modified":"2025-05-15T14:15:56","modified_gmt":"2025-05-15T14:15:56","slug":"laying-the-groundwork-how-emerging-managers-can-pre-market-a-strategy-in-europe-without-setting-up-a-fund","status":"publish","type":"post","link":"https:\/\/iqeq.com\/gb\/insights\/laying-the-groundwork-how-emerging-managers-can-pre-market-a-strategy-in-europe-without-setting-up-a-fund\/","title":{"rendered":"Laying the groundwork: How emerging managers can pre-market a strategy in Europe without setting up a fund"},"content":{"rendered":"
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By Mark Bollard, Client Relationship Director<\/em><\/p>\n

Raising capital for a fund is as much about timing and credibility as it is about performance and strategy. Over the past number of years, we\u2019ve seen how difficult fundraising can be, especially in the private credit space where approximately 60%<\/a> of the capital to Q3 2024 was raised by the top 10 managers \u2013 leaving little for others.<\/p>\n

For emerging managers, particularly those spinning out of established firms or launching their first vehicle, the question often arises: Do I need to set up a fund before I have investors committed?<\/p>\n

The short answer in Europe is: not necessarily.<\/p>\n

Thanks to the pre-marketing regime under the EU\u2019s 2019\/1160 Cross-Border Distribution of Funds (CBDF) Directive, managers now have a clearer framework to test investor appetite before incurring the time and expense of fund formation. But navigating this route requires strategic thought and compliance with a specific set of rules.<\/p>\n

What is pre-marketing?<\/h2>\n

Pre-marketing allows alternative investment fund managers (AIFMs) to engage with potential professional<\/strong> investors to gauge interest in a fund that is not yet established. This is particularly valuable for first-time managers who want to validate demand before launching and going through the process, and cost, of setting up a fund.<\/p>\n

Critically, this engagement must not amount to an offer or placement of units in a fund. It\u2019s a subtle but important distinction: you\u2019re sharing ideas, concepts and investment theses\u2014not subscription documents.<\/p>\n

Who can pre-market?<\/h2>\n

Only MiFID firms, EU-authorised AIFMs or non-EU AIFMs working through a local EU placement agent or tied third-party AIFM platform can rely on the pre-marketing rules.<\/p>\n

For emerging non-EU managers, particularly from the UK or US, working with a host AIFM<\/a> or local distribution partner is a key way of achieving access to European investors legally and compliantly.<\/p>\n

What can be shared?<\/h2>\n

Under the CBDF Directive, the materials shared during pre-marketing must be clearly identified as draft and not for subscription. These might include:<\/p>\n