German fund association Bundesverband Investment und Asset Management has welcomed proposals that most major investment funds be ‘regulated products' for the purposes of European plans to oversee more tightly some funds that were previously only loosely regulated.
German fund association Bundesverband Investment und Asset Management has welcomed proposals that most major investment funds be ‘regulated products’ for the purposes of European plans to oversee more tightly some funds that were previously only loosely regulated.
The proposals, for the Alternative Investment Fund Management directive, have “guaranteed the status quo for regulated fund products”, said the BVI.
Importantly, the €860bn Spezialfonds structure, often used by institutional investors for pension products, will remain as a regulated product.
“The plans for the regulation of existing products is largely right for the market requirements,” said Thomas Richter, BVI head.
The BVI has in the past expressed dismay parts of the AIFM could unintentionally hit parts of the mainstream asset management industry in Germany, even though the rules were initially meant to target mainly hedge and private equity funds.
For example, proposals from regulatory body ESMA suggested that under AIFM central functions of an investment vehicle should not be predominantly delegated – potentially hitting the Master KAG structure popular in Germany.
“The regulator should not take such a blanket approach,” Richter said.
He was also critical about proposals only to permit new real estate funds as closed products.
Today the BVI also welcomed the possibility of multi-national companies in Germany soon being able to pool their pension pots there.
The BVI has long agitated for the introduction of an Investment-Kommanditgesellschaft.
“With this the path will be open for pension pooling by internationally active companies in Germany,” said Richter. Internationally focused companies need solutions with which they can bundle their pension assets, run in a decentralised fashion, in a vehicle that is protected in insolvency and transparent for the application of double tax treaties, the BVI said.
But at present such companies must manage the assets to cover pension commitments from different jurisdictions in standalone vehicles, or pool them outside Germany.
“This is more expensive and less efficient, and Germany gets none of it,” Richter (pictured) said.
Countries like Belgium, the UK, Ireland, Luxembourg and the Netherlands, which already have issued the relevant regulatory and tax regulations, are the winners.