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Stand:updated on 01.04.2016 Hedge funds

Hedge funds launched and marketed in Germany are subject to supervision under the German Investment Code (KapitalanlagegesetzbuchKAGB). Authorised German asset management companies may establish single hedge funds and funds of hedge funds in Germany. Funds of hedge funds may be approved as retail or special funds, while single hedge funds may only be approved as special funds.

Funds of hedge funds

A fund of hedge funds may in principle acquire units in both domestic regulated single hedge funds and foreign investment funds with comparable investment policies as their target funds (section 225 (1) sentences 1 and 2 of the KAGB). As regards the choice of single hedge funds, in addition to the principle of risk diversification, other spreading rules apply; for instance, no more than 20% of a fund of hedge funds may be invested in a single target fund. Leverage – with the exception of borrowings in accordance with section 199 of the KAGB − and short-selling transactions may not be employed for funds of hedge funds (section 225 (1) sentence 3 of the KAGB). Before investing, funds of hedge funds have to obtain a minimum amount of information about the target funds. Thereafter they must monitor the investment strategies and risks of the target funds on an ongoing basis.

Single hedge funds

Unlike funds of hedge funds, single hedge funds may only be offered as special funds, i.e. they may only be marketed to professional and semi-professional investors. There are hardly any legal restrictions on the investment strategies of single hedge funds. They are, by definition, open domestic special alternative investment funds (AIFs) as set out in section 282 of the KAGB, which provide either for the use of leverage on a substantial basis or the sale of assets for the collective account of investors which do not form part of the AIF at the time of sale (short sale).

In this context, leverage designates any mechanism used by management companies to increase the investment level of an investment fund managed by it – either by borrowing, securities loans, leverage embedded in derivatives or any other means. In accordance with applicable Level 2 Regulations, leverage is used on a substantial basis when its calculated exposure exceeds three times the AIF’s net asset value.

The marketing provisions for hedge funds are governed by sections 293 et seq. of the KAGB.

Hinweis

Alle von der BaFin beaufsichtigten KVGen finden Sie in der Unternehmensdatenbank, alle beaufsichtigen Investmentfonds in der Investmentfondsdatenbank der BaFin.

Die BaFin veröffentlicht keine Verkaufsprospekte von Investmentfonds. Aktuelle Prospekte sind in der Regel auf der Internetseite der Kapitalverwaltungsgesellschaft zu finden.

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