The Danish Financial Supervisory Authority has published new questions and answers clarifying when managers of alternative investment funds must recognise leverage when calculating assets under management. The update addresses both the definition of leverage and the treatment of leverage in underlying structures, and it confirms that private equity funds can continue to exclude debt in intermediate structures where specified conditions are met. Leverage affects when a manager must apply for authorisation, as the threshold is lower for managers of leveraged funds. The new Q&A supplements the authority’s 17 December 2024 guidance statement on recognising leverage held in unlisted companies and issuers, which followed a European Commission response published in ESMA’s Q&A clarifying when an AIFM must include leverage that exists in unlisted companies and issuers controlled by an AIF. Further industry queries indicated continuing uncertainty, particularly among private equity and venture funds, around the use of the exemption from including exposure in unlisted companies and issuers.
Danish Finanstilsynet 2025-12-04
Danish Financial Supervisory Authority issues new Q&A clarifying when AIFMs must include leverage in assets under management calculations
The Danish Financial Supervisory Authority issued new Q&A guidance clarifying leverage recognition by alternative investment fund managers when calculating assets under management. It confirms private equity funds can exclude debt in intermediate structures under specified conditions, impacting authorisation thresholds for leveraged funds. This supplements previous guidance and addresses ongoing industry uncertainty regarding exemptions for unlisted companies and issuers.