New Legal Framework Regarding Loan Funds in Germany

June 28, 2016

BaFin, the German Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht) last year eased its administrative practice with respect to loan origination and loan restructuring activities of alternative investment funds (AIFs). This change – set forth in a May 2015 interpretative decision (BaFin Guidance) – was welcomed by the German fund industry as it mirrors similar initiatives adopted in other EU Member States that have created legal frameworks for loan origination funds. The change addresses concerns of investment managers, who had struggled with the fact that they were restricted from restructuring or extending the duration of loans originated by third parties and that were subsequently acquired by AIFs managed by German managers, even if such restructuring activities would have been in the best interests of investors.

Read "New Legal Framework Regarding Loan Funds in Germany."