Uniform legal basis for both open-ended and closed-ended investment funds

Since 22 July 2013, the statutory basis for managing both open-ended and closed-ended funds is the new German Capital Investment Code (Kapitalanlagegesetzbuch, KAGB).

The German Capital Investment Code, which transposes the European Union's Alternative Investment Fund Managers (AIFM) Directive, will replace the German Investment Act (Investmentgesetz). Its aim is to create a uniform standard of investor protection and curb the grey capital market.

The Code will apply to all those who manage either open-ended or closed-ended funds. As such, the managers of closed-ended funds will, for the first time, be obliged to comply with the type of legislation that has long governed open-ended funds.


The Capital Investment Code distinguishes between fund types defined as either Undertakings for Collective Investment in Transferable Securities (UCITS) or as Alternative Investment Funds (AIF).

The AIF category will include all closed-ended funds and those open-ended investment funds regulated under investment legislation but not defined as UCITS. These are mainly open-ended ''Spezialfonds'' (funds for institutional clients only) and open-ended property funds. Different licensing and reporting requirements will be in place for UCITS and AIF managers.