Wednesday, 1 April 2026
Amendments to Hungary’s framework governing alternative investment funds are set to take effect on 16 April 2026, introducing a broader role for such vehicles in the country’s credit market. The changes implement Directive (EU) 2024/927 amending AIFMD into national law and revise the existing Hungarian Act on Collective Investment Forms and Their Managers.
Under the current regime, investment funds have been largely excluded from direct lending, with only venture capital and private equity funds permitted to issue shareholder loans. The revised legislation will allow all alternative investment funds to apply for licences covering loan origination, as well as credit servicing and credit acquisition activities. Funds may also be established specifically to pursue lending strategies.
The reform introduces a new source of financing for borrowers that may face constraints in accessing traditional bank funding. Market participants expect fund-based lending to appeal particularly in situations requiring faster execution, greater structural flexibility or a higher tolerance for risk.
The updated framework defines loan origination broadly. It includes both direct lending by a fund acting as the original lender and indirect structures, where financing is provided through third parties or special purpose vehicles acting on behalf of the fund. At the same time, funds engaging in these activities will be subject to detailed requirements related to risk management, leverage and liquidity.
A new category of “loan-originating AIFs” is also introduced. These are funds whose primary strategy is lending, or where loans account for at least half of net asset value. As a general rule, such vehicles must operate as closed-ended structures, unless the manager can demonstrate to the National Bank of Hungary that liquidity arrangements are consistent with the fund’s strategy and redemption profile.
The amendments also formalise the treatment of shareholder loans. Venture capital and private equity funds will be required to obtain licences if they wish to continue providing such financing. Shareholder loans are defined as loans granted to companies in which the fund holds at least a 5 percent stake and cannot be transferred independently of that ownership. These loans will remain subject to less stringent requirements than those applied to broader loan origination activities.
Hungary has adopted a restrictive approach in certain areas permitted under EU rules. Alternative funds will not be allowed to grant loans to consumers or carry out credit servicing for retail borrowers. In addition, fund managers will be prevented from engaging in lending strategies based solely on assigning receivables to third parties.
Despite the introduction of the new regime, some uncertainty remains. The legislation does not yet set out the detailed conditions or procedural framework for obtaining licences for lending, credit servicing or acquisition activities. This lack of clarity is expected to complicate preparations for market participants seeking authorisation.
Transitional provisions will apply until April 2029 for funds established before April 2024 that are already engaged in shareholder lending. However, the rules do not clearly address whether lending activities that will require licensing under the new regime can continue during the transition period without authorisation. Questions also remain over whether existing facilities can be drawn after the new rules take effect, or whether disbursements will need to be postponed pending regulatory approval.
Overall, the changes mark a shift in Hungary’s capital markets, positioning alternative investment funds as a more active source of financing, while introducing a more complex regulatory framework for participants entering the lending space.
Source: CMS
