On July 20, the Federal Ministry of Finance and the Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin) published its draft for the implementation of the Alternative Investment Fund Managers Directive (AIFMD).

Highlights of the new ‘Capital Investment Code’ (Kapitalanlagegesetzbuch) include:

Distinction between AIF whose shares/units may be held by professional investors only (so called ‘specialised-AIF’) and AIFs whose shares may be held by non-professional investors.

• Real estate (RE) and infrastructure funds can only be established as closed-ended funds. Existing open-ended RE/infrastructure funds would benefit from a grandfathering rule and could continue to exist in the same form as before.
• Non-professional investors will only be permitted to invest in certain fund types, e.g. they are prohibited from directly investing into certain fund types such as hedge funds or private equity funds. Investment into these vehicles will only be allowed via fund of funds or master-feeder structures.
• Private placements for third country funds should be abolished. Third country funds would only be allowed to market their funds in Germany if certain (extensive) requirements are met.

Interested parties have until August 17 to comment on the 500-page document.