NORWAY Law and Practice Contributed by: Daniel Nygaard Nyberg, Karoline Ulleland Hoel, Ole Andenæs and Jens Fredrik Bøen, Wikborg Rein Advokatfirma AS
2. Funds 2.1 Types of Alternative Funds and Structures The Norwegian AIF landscape is varied, with private equity and venture capital funds, fund of funds, ship - ping and offshore-related funds, and real estate funds standing out as the predominant alternative fund types. Hedge funds also maintain a notable pres - ence. Family offices in Norway have become more common, managing substantial assets and frequently diversifying into alternative investments, reflecting a global trend. The regulatory framework governing fund vehicles in Norway primarily falls into two main categories: UCITS and AIFs, each with its own distinct set of regulations and compliance obligations. UCITS are generally less suited to alternative invest - ment strategies due to regulatory constraints, such as bi-monthly redemption requirements and limitations on investment types. By contrast, AIFs offer greater flexibility, making them the preferred choice for imple - menting alternative investment strategies. Domestic AIFs are typically established as limited partnerships ( indre selskap ) or private limited compa - nies ( aksjeselskap ). Norwegian limited company struc - tures share many similarities with the limited company funds seen in the largest fund jurisdictions, although without the same flexibility in terms of variable capital. It is also common for Norwegian investment teams to establish their funds in Luxembourg, Guernsey or Jersey, or Ireland. It should be mentioned that the AIFM Act does not apply any restrictions on the legal structure that a fund may adopt. AIFMs may, however, only be organised as a limited company. 2.2 Regulatory Regime for Funds As a party to the EEA Agreement, Norway is bound by EU legislation relevant to the single market, including financial regulatory and asset management legislation such as the AIFMD. The principal regulatory frame - work in Norway is the AIFM Act, which integrates the provisions of the AIFMD.
Where a regulated type of fund product is not chosen, the AIFM Act does not regulate AIFs on a product lev - el. Accordingly, there are no general product restric - tions for AIFs. However, there may be other regulatory restrictions that limit a fund’s investment strategies in Norway, such as the credit monopoly (as further detailed in 2.5 Loan Origination ). The AIFM’s Regulatory Status and Fund Structure The regulatory landscape primarily depends on the AIFM’s regulatory status and the selected fund struc - ture. Sub-threshold managers Norway has implemented the AIFMD thresholds, allowing for light-touch regulation of managers of smaller funds that are not mutual funds (in simple terms, closed-end funds with less than EUR500 mil - lion and open-end funds with less than EUR100 mil - lion). Managers in this category are exempt from FSAN authorisation and are only subject to a simplified registration process. They are also not subject to full compliance with the AIFM Act, unless they have opted in to the authorisation regime. Notably, these manag - ers cannot market AIFs in other EEA states under the pan-European marketing passport, nor can they mar - ket to retail investors in Norway. They may, however, elect to opt in to the authorisation regime, thereby accessing the same rights and obligations as author - ised managers. Fully licensed managers These managers are subject to the rights and respon - sibilities under both the AIFMD and the AIFM Act. These include benefiting from the EU passporting regime, as well as marketing to retail investors subject to further specific authorisation from the FSAN. For unregulated AIFs, both Norwegian and EEA licensed AIFMs must seek additional approval from the FSAN before marketing to retail investors in Norway. Regulated fund types Norway identifies seven key regulated funds: UCITS, national funds, special funds, EuVECAs, EuSEFs (European social entrepreneurship funds), ELTIFs
217 CHAMBERS.COM
Powered by FlippingBook