France Tightens Liquidity Safeguards for Evergreen Private-Market Funds
The AMF has introduced new requirements for liquidity buffers and stress testing at certain open-ended private equity and real estate funds, strengthening safeguards around investor redemptions.
France’s financial markets regulator has introduced new liquidity management requirements for certain open-ended real estate and private equity funds, as European authorities focus on the challenges of offering redemption rights against less liquid underlying investments.
The Autorité des marchés financiers (AMF) published Instruction DOC-2026-05 on 13 October, setting out requirements for real estate collective investment undertakings (OPCIs) and evergreen private equity funds known as FCPRs that are not authorised under the EU’s European Long-Term Investment Fund (ELTIF) framework.
The instruction establishes a permanent liquid-asset buffer intended to help these funds meet redemption requests. It also sets out the regulator’s expectations for liquidity stress tests that demonstrate a fund’s capacity to honour withdrawals under different scenarios.
Previously, the AMF required managers seeking authorisation for these fund structures to hold liquid assets representing 30% to 40% of net assets and to submit stress tests demonstrating their ability to meet redemption requests. The new instruction updates the requirements in light of the revised ELTIF framework and the development of European rules for liquidity management in open-ended alternative investment funds.
The AMF has also specified procedures where changes to redemption frequency or notice periods affect the minimum required liquid-asset buffer. Such changes require prior authorisation, and investors must be specifically informed. Where changes reduce the minimum liquidity requirement, investors may also be entitled to request redemption without charge.
Existing funds established before 13 October 2026 have two years to comply with the new requirements. Managers must notify the AMF of compliance and submit the relevant fund documentation and stress tests.
The measures underline a central challenge for evergreen investing: fund managers must balance investors’ expectations of periodic liquidity against the time required to sell real estate and private-company investments.
As these structures expand access to private markets, regulatory scrutiny of liquidity design and stress testing is becoming an increasingly important part of fund governance.