Credit funds - Just another product option for alternative investment funds?
A revision to German Federal Financial Supervisory Authority (BaFin) administrative practices, as well as the implementation act of the UCITS V directive, has broadened the scope for setting up credit funds in Germany in the form of Alternative Investment Funds (AIF).
The additional options available to market participants—depending on their individual situation—should now be considered: investment management companies (KVGs) have gained additional business potential through the use of credit funds, however they must guarantee a MaRisk-compliant (minimum requirements for risk management) credit choice and processing model. Banks now have the opportunity to not only increase the risk on their own books, but also to act as an agent for KVG activities. The latter entails selling their credit know-how without having to submit themselves to the necessary requirements in terms of their own capital. Credit funds open alternative investment avenues to institutional investors and above all to insurers, pension schemes and pension funds.
Performance magazine issue 20, January 2016
Performance is a triannual digest, dedicated to investment management professionals, which brings you the latest articles, news and market developments from Deloitte’s professionals and clients.