Wirtschaftskanzlei Heuking Kühn Lüer Wojtek | Rechtsanwälte, Steuerberater und Notare

AIFs - marketing alternative investment funds in Germany

Following the financial crisis and experiences of 2008 the European Parliament and the Council adopted the directive 2011/61/EU of 8 June 2011 on Alternative Investment Fund Managers (AIFM Directive).

High standards for non-EU AIFM / AIF – marketing alternative investment funds in Germany

Following the financial crisis and experiences of 2008 the European Parliament and the Council adopted the directive 2011/61/EU of 8 June 2011 on Alternative Investment Fund Managers (AIFM Directive). Given the fact that AIFM activities, too, may also have served to spread or simplify risks through the financial markets, the AIFM Directive aims at establishing common requirements governing the authorisation and supervision of AIFM in order to provide a coherent approach to the related risks and their impacts on investors and markets in the Union. 

According to Art. 66 of the AIFM Directive all member states have to adopt the laws, regulations and administrative provisions necessary to comply with the AIFM Directive by 22 July 2013. In Germany the AIFM Directive was adopted by the Kapitalanlagegesetzbuch (German Capital Investment Code – KAGB) that came into effect 22. July 2013. 

The German legislator has, however, adopted not only the requirements of the AIFM Directive but has taken the occasion to implement a complete and consistent set of rules for all fund managers and all types of investment funds in the KAGB. Following this approach the KAGB includes - different from the concept of the AIFM directive - special AIF product regulation rules such as regulations regarding acquirable assets and investment limits. As a result, since 2013 complex regulatory obligations for AIFM and AIF are to be complied with where AIF are to be placed in or out of Germany. 

According to the KAGB rules in principle a notification is required before the AIF can be distributed to investors. It is important to know, however, that controversy to the law in other EU-member states the German law provides now for an extensive interpretation of "distribution". As a consequence private placements are no longer admissible in Germany without having passed a notification procedure with the German Federal Financial Supervisory Agency (Bundesanstalt für Finanzdienstleistungsaufsicht) – BaFin.  Only with regard to certain specialized funds the law provides for a restriction according to which a distribution is given only if it is executed on the initiative of the management company or on its behalf. Thus, in case of qualifying investors approaching the AIFM on their own initiative (so-called “Reverse Solicitation”) no antecedent notification of the BaFin is required.



As a group of HKLW we have an extensive expertise in advising German and foreign investment funds /companies, German and foreign investment management companies as well as investors in all matters resulting from the KAGB such as 

  • Setup of German or foreign AIF / OGAWs (EU-, EEA-, third party countries);
  • Distribution or sale of foreign fund units / private placement of foreign fund units in Germany and/or other EU member states;
  • Notification or registration of foreign fund units for distribution in either Germany and/or other EU Countries such as Luxembourg, Ireland, Malta 
    etc. to be indirectly registered for distribution in Germany;
  • Investment of private investors, semi-professional and professional investors (including institutional investors) in foreign funds;
  • Drafting of fund prospectuses / offering documents;
  • Setup of (externally managed / self-managed) German or foreign management companies;
  • Adaptation of existing AIFM / AIF to the new requirements under the KAGB (under consideration of the existing transition periods);
  • German investment tax law.

Useful Links

Explanatory Note BaFin issued in August 2014

If a foreign non-EU/EEA AIF management company intends to market foreign non-EU/EEU AIFs to professional or semi-professional investors in Germany, the notification procedure under Sec. 330 German Investment Code (KAGB) must be passed. In an explanatory note (Merkblatt) the Federal Financial Supervisory Agency (BaFin) explained the requirements of this notification procedure.

EU Directive 2011/61/EU

The EU Directive 2011/61/EU dated June 8, 2011 aims at framing the activities of managers of Alternative Investment Funds (AIFs). The goal is to create an internal market for these managers whilst putting in place a harmonised regulatory framework.

German Capital Investment Code - KAGB

The EU Directive 2011/61/EC has been implemented into German law with the “law on the implementation of Directive 2011/61/EU on investment funds”. Here, a  consistent body of rules and regulations for investment funds and their managers was created to contribute to the attainment of a European single market in the investment funds area and uniform high standards of investor protection. In particular, the Investment Law (Investmentgesetz) was abolished and replaced by the German Capital Investment Code (Kapitalanlagegesetzbuch - KAGB).


The Federal Financial Supervisory Authority ("BaFin") has on 4 July 2013 published a letter (reference number WA 41-Wp 2137-2013/0293) and answered frequently asked questions about the marketing and purchase of investment funds under the provisions of KAGB (FAQ). The FAQ catalogue is to be continually updated and, if necessary, supplemented by additional questions.

Agreement between Germany and Switzerland on UCITS compliance

On December20th, 2013 the German Federal Financial Supervisory Agency (BaFin) and the Swiss Financial Market Supervisory Authority (FINMA) have signed an agreement according to which UCITS subject to German law and the Swiss Securities Funds (Effektenfonds) both meet the requirements of the Directive 2009/65/ EC of the European Parliament and thus are to be qualified as equivalent. Consequently, for distributing shares in Swiss Securities Funds in Germany the simplified rules for EU UCITS pursuant to Sec. 310, 311 German Investment Code are applicable. For shares in UCITS subject to German law to be distributed in Switzerland, the provisions of Sec. 312, 313 German Investment Code are applicable.

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