European fund management has reached an inflection point, where growing complexity meets expanding opportunity. The regulatory demands introduced since AIFMD’s launch in 2013 have transformed what it takes to operate an authorised management company.
Compliance, governance, and distribution requirements have grown to the point where only the very largest firms can justify building the infrastructure independently.
The result has been a fundamental shift. Third-party management companies (“ManCos”) and authorised alternative investment fund managers (“AIFMs”) have moved from being boutique solutions to becoming the default operating model for managers targeting Europe and beyond. Luxembourg and Ireland now host the majority of these managers, offering institutional-grade infrastructure that delivers speed, efficiency, and investor credibility.
For managers serious about European growth, the decision is less about whether to outsource and more about which provider to partner with.
The growth of third-party ManCos
Third-party ManCos have expanded rapidly over the past decade. They provide fund managers with the substance, governance, and regulatory expertise without the need for managers to invest in and build this infrastructure themselves.
The reasons behind this trend are both strategic and practical.
- Regulatory change: AIFMD II introduces additional reporting and oversight obligations. Partnering with a third-party ManCo ensures readiness without the cost of building in-house systems.
- Speed to market: Launching a fund through a third-party platform can take months instead of years, enabling managers to meet investor demand more quickly.
- Cost management: Sharing infrastructure lowers fixed costs and avoids the expense of maintaining a full-scale local operation.
- Investor confidence: Institutions are reassured by the governance and compliance structures that come with established third-party providers.
- Growth opportunities: As new structures and distribution channels emerge, managers who choose providers with the right scale and expertise are best positioned for sustainable growth.
- Investor access: Choosing the right provider means understanding what you want to retain in-house and what you want to outsource. For example, do you need support with fund distribution? It is important to understand how your ManCo or AIFM provides this support, what regulatory framework underpins it, and how the model is viewed by regulators.
Complementing other routes to market
Third-party ManCos are not a replacement for other forms of European market access. Non-EU managers may still choose to market under National Private Placement Regimes (“NPPRs”), where available, while larger managers may continue to operate their own authorised entities.
What is changing is the role of outsourcing as part of a broader distribution and scalability strategy. A third-party ManCo can complement NPPR access or in-house teams, providing consistent oversight across funds and jurisdictions, streamlined reporting, and access to specialist expertise in structuring UCITS, AIFs, and hybrid models.
By integrating compliance, risk management, and reporting functions through an established provider, managers can scale efficiently without proportionate increases in cost or complexity. This makes third-party ManCos valuable not only for smaller or first-time entrants but also for global managers optimising their European operations.
Learn more in our European fund strategies guide
For an in-depth look at how third-party ManCos and AIFMs are reshaping fund management in Europe, download our guide, European fund strategies: ManCo solution for structuring and managing European funds.
