(20)To avert moral hazard and maintain the general credit quality of loans originated by AIFs, such loans should be subject to risk retention requirements when transferred to third parties. With the same objective, AIFMs should be prohibited from managing an AIF that originates loans with the sole purpose of selling them to third parties (‘originate-to-distribute strategy’), regardless of whether that AIF meets the definition of a loan-originating AIF. Loans should be granted for the sole purpose of investing the capital raised by the AIF in accordance with its investment strategy and regulatory constraints. However, the AIFM should be able to implement that investment strategy in the best interests of the AIF’s investors. That means that derogations from the risk retention rules are necessary and should cover cases where the retention of part of the loan is not compatible with the implementation of the AIF’s investment strategy or with the regulatory requirements, including product requirements, imposed on the AIF and its AIFM. Those cases include situations where retaining part of the loan would result in the AIF exceeding its investment or diversification limits or breaching regulatory requirements, such as restrictive measures adopted under Article 215 of the Treaty on the Functioning of the European Union (TFEU), or where the AIF is entering liquidation, or where the borrower’s situation has changed, for example in the event of merger or of default of the borrower if the AIF’s investment strategy is not to manage distressed assets, or where the AIF’s asset allocation is changed, resulting in the AIF no longer pursuing exposure to a specific sector or to a specific asset class. An AIFM should, at the request of the competent authorities of its home Member State, justify its decision to make use of such a derogation from the risk retention rules, and should be required to comply on an ongoing basis with the overarching principle of a prohibition on originate-to-distribute strategies.