We set out below some preliminary considerations on the proposed key changes that would affect asset managers and collective investment funds, focusing on both the opportunities offered by the new regime and the amendments that would be desirable to implement in the final version of this piece of legislation.
Headline changes
The Draft Decree proposes to: (i) introduce, for the first time, an Italian limited partnership (the Limited Partnership) as a legal form available for Italian alternative investment funds (AIFs); and (ii) reshape the operational rules for Italian collective investment funds (CIFs), including a re-cast of the early redemption framework for closed-ended CIFs.
The new Italian Limited Partnership
The Limited Partnership is designed to make the Italian market more attractive and to further support private equity and venture capital strategies. It sits alongside the existing Italian fund forms, namely the contractual fund (fondo comune di investimento) and the corporate fund (SICAV or SICAF).
The key features are as follows.
It is incorporated in Italy as a società in accomandita per azioni (limited partnership by shares) with separate legal personality. It is closed-ended and must have a minimum initial share capital of EUR50,000.
There are two classes of partner. General partners (soci accomandatari) have joint and several unlimited liability for the company’s obligations and act as directors, subject to duties equivalent to those applicable to directors of ordinary joint-stock companies. Limited partners (soci accomandanti) have liability limited to their committed capital and are excluded from executive and managerial functions.
The corporate object is limited to private equity and/or venture capital strategies, currently defined as investing in unlisted companies through equity instruments, debt instruments, or similar forms, including top-up investments after a potential listing.
Capital may be raised by issuing shares and/or other equity instruments, or through other means permitted by the by-laws (the issuance of bonds is, however, prohibited by law).
An umbrella structure is permitted, enabling multiple sub-funds to be established and launched over time. Each sub-fund is ringfenced and is treated as a separate CIF, with potentially different assets and investor bases.
Eligibility is limited to professional investors and semi-professional investors, i.e., retail investors who may be admitted to reserved AIFs, subject to specified conditions.
Voting rights attached to shares, and any limitations, are as set out in the by-laws.
As with other Italian corporate fund forms (SICAV and SICAF), the Limited Partnership may be internally or externally managed. Externally managed Limited Partnerships may appoint either an Italian AIFM or an EU AIFM. Their by-laws must include appropriate clauses to ensure timely and adequate identification of the external manager, including replacement mechanics, and no prior authorization is required for the vehicle itself. Internally managed Limited Partnerships qualify as AIFMs and therefore require authorization by, or registration with, the Bank of Italy.
Unless otherwise provided in the Draft Decree, the Limited Partnership remains subject to the general regime under the Italian Civil Code applicable to società in accomandita per azioni.
CIF operational rules moved into primary law: early redemptions
The Draft Decree proposes to migrate core operational rules for CIFs from secondary legislation (notably, Decree of the Ministry of Economy and Finance No. 30 of March 5, 2015, as amended) into the IFA. A central consequence is a revised early redemption regime for closed ended CIFs.
Under the existing framework, redemptions prior to maturity are generally not permitted, subject to limited exceptions. Early redemptions could occur at the manager’s election on a pro-rata basis across all investors, or at investors’ election, to the extent matched with new issuances of shares/units and, for unlisted funds, up to the amount of permitted financing, capped at 10% of fund assets.
The Draft Decree allows additional early redemption mechanisms, subject to investor-protection safeguards and alignment with each CIF’s investment and redemption policies. Early redemptions may be made at the manager’s election and need not be strictly proportionate across all investors, provided that the fund’s governing documents set out the applicable procedures and requirements, and that the following conditions are met:
- Alignment: Investment and valuation policies must align with the redemption policy, including frequency.
- Access: Redemption windows must be available to all investors and appropriately disclosed.
- Liquidity guardrails: The maximum amount available for early redemptions must be linked to a percentage of the CIF’s liquid assets, set by the AIFM to reflect the CIF’s asset mix, avoid jeopardizing the strategy and liquidity profile, and protect remaining investors.
- Leverage limits: Any financing used must comply with the existing leverage limit noted above.
- Notice: Prior notice periods must be consistent with the fund’s governance and liquidity risk management procedures.
- Equal treatment: Investors must be treated equally.
- Lock-up: An initial lock-up of at least 36 months applies, during which early redemptions are not permitted.
Opportunities for managers
The Limited Partnership offers a domestically robust, internationally recognizable vehicle for private equity and venture capital strategies, with familiar governance dynamics and optionality on internal versus external management.
The early redemption reforms give closed-ended funds a more flexible toolset to manage investor liquidity, while locking in robust safeguards to protect strategy integrity and remaining investors.
For managers, the immediate priority will be to calibrate by-laws and fund documentation to the new parameters (including redemption mechanics, disclosure of redemption windows, and liquidity risk processes). It would also be possible to consider the Limited Partnership where sponsor alignment and governance control are key.
What can be improved in the legislative text?
Despite the progresses outlined by the regulatory reform, Italy’s fund toolbox still lags behind leading jurisdictions on certain desirable features, such as evergreen funds, Limited Partnerships also suitable for other strategies (in addition to PE and VC), and open‑ended structures suitable for illiquid strategies.
Directive EU/2024/927 (AIFMD 2), which amends the previous directive of 2011 on the management of AIFs and whose implementation is scheduled by April 2026, should also be taken into account. Considering that the IFA is expected to be substantially amended and reshaped once again to include an open-ended option for Italian credit CIF (introducing for the very first time in
the domestic regime an open-ended structure for an illiquid strategy), a fundamental question arises as to why the Draft Decree does not extend this option to other illiquid strategies.
Given the early stage of this Draft Decree and the ongoing AIFMD 2 implementation process, there is surely still room and time for targeted fine‑tuning to hopefully align the Italian regulatory framework more closely with a highly competitive international framework.
What happens next?
The Draft Decree is currently under review by the Italian Parliament, will require final approval by the government and will be published in the Official Gazette by the coming months. Second‑level regulations will, in any event, need to be updated to make the regime provided for by the new piece of legislation fully effective and enforceable.
