Germany To Limit Hedge Funds To 'Professionals'

Jul 25 2012 | 11:09am ET

Germany has never been shy about its dislike of hedge funds; the country has consistently pressed for their strict regulation and former Vice Chancellor Franz Müntefering famously referred to them as "swarms of locusts." So it is no surprise that the country has introduced tough a new law to bring hedge funds to heel within its borders.

The new bill, introduced today by Finance Minister Wolfgang Schäuble, would bar all but professional investors from directly investing in hedge funds. All others would have to settle for funds of hedge funds—and even those would have to carry a warning from the finance minister that "this investment fund invests in hedge funds, which are not subject to any legal limitations on leverage or risk."

"The stated aim of this law is to provide protection to private investors against especially risky investments," Johannes Blankenheim, a spokesman for Germany's Finance Ministry, said.

Germany's cabinet is expected to take up the measure after the summer. In addition to the tough new limits on who can invest, the law will also bring Germany into line with the European Union's new rules on alternative investments, which come into force next year.

Unsurprisingly, the German hedge fund industry isn't happy. Frank Dornseifer of the Bundersverband Alternative Investments called Schäuble's proposals "contradictory," the Berliner Zeitung reports.


In Depth

Q&A: High Conviction, Low Correlation

Oct 30 2014 | 7:35am ET

Acadian Asset Management's numbers are big: over $70 billion in assets under management...

Lifestyle

Ex-Hedgie Steyer Gives $56M To Climate Action Super PAC

Oct 28 2014 | 9:23am ET

Retired Farallon Capital founder Tom Steyer has poured almost $56 million into his...

Guest Contributor

Hedge Funds Weather A Data Management Perfect Storm

Oct 22 2014 | 12:28pm ET

From a regulatory standpoint, nearly every development since the crisis has placed...

 

Videos

Editor's Note

    Guidelines for Guest Articles

    Oct 22 2014 | 9:46am ET

    We are always looking for guest articles from hedge fund managers and buy-side firms.

    If you are interested in submitting a contributed piece for possible publication on FINalternatives, please take a look at the specs. Read more…

 

Futures Magazine

October 2014 Cover

Demeter: Family affair

David and James Hamman launched their fundamental Livestock and Grains Program in March of 2010 but it really was decades in the making.

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.