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Stand:updated on 28.11.2017 | Topic Investment funds Registered office and head office in Germany

Companies wishing to manage investment funds as German asset management companies with their registered office and head office in Germany need written authorisation from BaFin or must register with BaFin. Such activity is considered management of an investment fund when the company provides at least portfolio management or risk management.

Investment funds are divided into UCITS and AIFs. Undertakings for collective investment in transferable securities (UCITS) are investment funds that meet the requirements of Directive 2009/65/EC (UCITS Directive). All other investment funds are AIFs. Correspondingly, there are German UCITS management companies and AIF management companies. German asset management companies can also manage both forms of investment fund, provided they fulfil the requirements applicable to both forms.

What information and documents must accompany an application for authorisation for a German UCITS management company or respectively an application for authorisation for a German AIF management company and further information on the process of granting authorisation can be found in a guidance notice (only available in German) for an application for authorisation for a German UCITS management company or respectively in a guidance notice (only available in German) for an application for authorisation for a German AIF management company.

Under certain circumstances, German AIF management companies need only to register with BaFin. German AIF management companies have their registered office and their head office in Germany and manage alternative investment funds (AIFs).

Registration is sufficient for German AIF management companies if

  1. they exclusively manage special AIFs and the managed assets do not exceed the value of €100 million with the use of leverage or €500 million without the use of leverage, where in the latter case investors cannot exercise redemption rights within five years of the first investment ; or
  2. they manage closed-ended retail AIFs in Germany whose units are held by not more than five natural persons and whose assets do not exceed the sum of €5 million with leverage; or
  3. they manage directly or indirectly closed-end ed AIFs issued in Germany, including retail AIFs, and their assets do not exceed the sum of €100 million with leverage.

The shares or units of open-ended AIFs can be repurchased or redeemed prior to the commencement of its liquidation phase or wind-down, in accordance with the procedures and frequency set out in its rules or instruments of incorporation, prospectus or offering documents.

If this possibility does not exist, it is a closed-ended AIF.

BaFin has published an expert article on the differences between German asset management companies with authorisation and those that are merely registered.

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