WEST PALM BEACH, FL (HEDGECO.NET) – BaFin, the German financial services regulator is relaxing hedge fund investment provisions, according to published reports. German Insurance Companies will now bepermitted to invest up to 5% of their total assets in hedge fund instruments. However, relaxing the existing rules comes with some strings attached. While insurance establishments may invest aspecific amount, the type of funds where such assets may be invested will have to meet certain criteria.
According to the report, BaFin will allow insurance companies to invest such assets into fund of funds and single funds. However the regulator may prevent a full ownership of such hedge funds. There is a growing demand in Germany for fund of fund products, which seem to be generally suitable for the relatively new German hedge fund investors.
Earlier in the year, the German authorities loosened hedge fund tax reporting requirements. This development follows recent announcements by German regulators that hedge funds have been authorized for retail investors in the country. The new rules seek to address numerous complaints from the German hedge fund industry participants who criticized the reporting requirements specified in the retail hedge fund laws introduced earlier this year.
A spokesman for the regulator said the revisions were introduced because the Ministry in charge of promulgating hedge fund regulations realized that some of the excessive information being sought from hedge fund managers was not immediately needed.
According to the report, BaFin has sent out the investment law draft to insurance establishments for approval. Klaus Bollmann, chief financial officer at Union Alternative Assets said, “There is a lot of interest, in the long term we could see a commitment of more than 5 percent of our assets in hedge funds, therefore we will welcome less restrictive legislation.�
Paul Oranika
Editor-in-Chief
HedgeCo.Net
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