Florian Geuder comments on the new EU lending fund regulations under AIFMD II and Germany’s Fund Risk Limitation Act, noting that the framework appropriately addresses emerging risks without overregulating the market and preserves an attractive investment environment

With the AIFMD II Directive and the German Fund Risk Limitation Act, which took effect on April 16, 2026, new guidelines apply to lending funds: Leverage caps of 300 percent for closed-end funds and only 175 percent for open-end structures, restricted lending consortia, and a clear commitment to closed-end vehicles, as open-end vehicles pose a risk of maturity mismatches. Lawyer Florian Geuder of King & Spalding praises the fact that the legislature refrained from “gold plating” - the regulation addresses the risks now under discussion without weakening the investment environment.

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