Suche
Contact
02.09.2016 | KPMG Law Insights

Banking and Capital Markets Law – Fund Industry: Granting, Restructuring and Prolongation of Loans by Investment Funds

Fund industry: origination, restructuring and prolongation of loans by investment funds

BaFin amended its administrative practice on debt funds in a letter dated May 12, 2015. This makes it possible to grant loans for the account of such AIFs for which the KAGB provides no or almost no product specifications. Liberalization in this area is leading to new business opportunities for fund managers and investors, also in competition with traditional banks.

Legal challenges

From a legal perspective, the detailed requirements of BaFin must be observed in particular when structuring debt funds.

Capital management companies (KVG) and custodians that wish to launch or hold debt funds in custody may have to adapt their internal organization to the new product. These include, for example:

  • ensuring professional suitability at the management level
  • the establishment of a related risk management system in accordance with MaRisk
  • The expansion of the compliance function together with the compliance manual
  • Fund managers must ensure the necessary minimum liquidity of the fund, if applicable
  • If individual process steps are outsourced, the outsourcing agreements must be documented in accordance with the regulatory requirements.

From an investor’s point of view, the new Investment Ordinance and the Solvency II regulations to be observed for the establishment of investments for insurers must also be taken into account at the fund level. Thus, it is becoming apparent that, in addition to the new rules of SolV II, the AnlV will in fact also remain relevant.

With regard to the granting of loans, appropriate model documents and processes must be drawn up, tracked and, in each individual case, concretized and, if necessary, negotiated.

Tax challenges

From a tax perspective, the selection of the fund vehicle and withholding taxes on interest income are of particular importance for debt funds.

As a rule, a fiscally transparent fund vehicle should be preferred from the investor’s point of view, regardless of whether a closed-end or open-end fund is chosen. In addition, consolidation according to HGB or IFRS as well as regulatory requirements on the part of the fund vehicle as well as on the part of the investor must be taken into account. Against this background, however, we also recommend a comparison with foreign fund structures as well as securitization vehicles.

KPMG Services

KPMG offers the structuring and implementation advice required for the implementation of debt funds from a single source with its cross-functional, well-coordinated Alternative Investments Solutions Team at the KVG level as well as at the fund and asset level. This ensures highly competent, efficient and pragmatic solution-oriented project processing.

Further crucial issues for the tax structuring of a debt fund are the optimization of withholding tax on interest income or the possibility of withholding tax credits at investor level, tax compliance and reporting requirements.

Furthermore, the VAT treatment of the fund management fee or outsourced management services must be taken into account.

Implementation together with Advisory

The topic of debt funds is of concern to investors as a whole, as well as to capital management companies and depositaries.

Essentially, there are four fields of action to fulfill the requirements for the administration and custody of debt funds:

Acquisition control / product design: Investment and marginal review must check debtors and maturity congruence when acquiring loans. It may make sense to provide for corresponding new product processes in order to ensure or check, among other things, mappability, data availability and legal aspects. It does not matter whether the loan is to be acquired or issued by a fund.

Risk assessment and risk management: Unsecuritized loans differ significantly from listed products such as bonds, particularly in terms of data availability and liquidability. In risk measurement, this circumstance must be taken into account accordingly and the methods adjusted where necessary. In order to assess credit risk, it is necessary to evaluate the creditworthiness of debtors and changes in this creditworthiness over time with sufficient accuracy. The same applies to the development of the level of the credit risk premium.

Keyword “credit department”: Due to the partial applicability of MaRisk, KVGs must create and permanently maintain structures similar to a bank’s credit department or, alternatively, align their outsourcing controlling accordingly.

Compliance: The compliance function must be adapted and expanded accordingly.

Explore #more

13.06.2024 | Press releases

Handelsblatt and Best Lawyers honor KPMG Law Experts

Best Lawyers has once again identified the best commercial lawyers in Germany for 2024 exclusively for Handelsblatt. A total of 28 lawyers were honored by…

27.05.2024 | KPMG Law Insights

Agreement on ecodesign regulation: products to become more sustainable

After lengthy negotiations, the Council and Parliament of the European Union reached a provisional agreement on the Ecodesign Regulation on the night of December 5,…

22.05.2024 | KPMG Law Insights

The AI Act is coming: EU wants to get a grip on AI risks

For many people, artificial intelligence (AI) is the great hope for business, healthcare and science. But there are also plenty of critics who fear the…

17.05.2024 | KPMG Law Insights

Podcast series “KPMG Law on air”: When the family business is to be sold

Around 38,000 family businesses are currently handed over each year. In most cases, the change of ownership takes place within the family. But more and…

03.05.2024 | KPMG Law Insights

Doubts about inability to work? What employers can do

The certificate of incapacity for work (AU certificate) serves as proof of incapacity for work due to illness. However, only if the certificate meets certain…

27.03.2024 | KPMG Law Insights

EU Buildings Directive: life cycle greenhouse potential becomes relevant

On March 12, 2024, the EU Parliament approved the amendment to the EU Buildings Directive. The directive obliges member states and, indirectly, building owners and…

19.03.2024 | Business Performance & Resilience, KPMG Law Insights

CSDDD: Provisional agreement on the EU Supply Chain Directive

The EU member states agreed on the CSDDD, the EU Supply Chain Directive, on March 15, 2024. Germany abstained from the vote. Negotiators from the…

21.02.2024 | KPMG Law Insights, KPMG Law Insights

The Digital Services Act – what does it mean for companies?

The Digital Services Act (DSA) is a key component of the EU’s digital strategy and came into force on November 16, 2022. As a regulation,…

15.02.2024 | KPMG Law Insights

Data compliance management: How to implement it in practice

Part 3 of the article series “Professional tips for data compliance management”   The third part of this series of articles deals with data compliance

14.02.2024 | Business Performance & Resilience, PR Publications

Guest article in ZURe: Monitoring the implementation of the LkSG

The current issue of ZURe (p. 20 ff.) contains a guest article by KPMG Law Partner Thomas Uhlig (Head of General Business and Commercial Law),…

Contact

Dr. Ulrich Keunecke

Partner
Head of Sector Legal FS Insurance

THE SQUAIRE Am Flughafen
60549 Frankfurt am Main

tel: +49 69 951195-075
ukeunecke@kpmg-law.com

© 2024 KPMG Law Rechtsanwaltsgesellschaft mbH, associated with KPMG AG Wirtschaftsprüfungsgesellschaft, a public limited company under German law and a member of the global KPMG organisation of independent member firms affiliated with KPMG International Limited, a Private English Company Limited by Guarantee. All rights reserved. For more details on the structure of KPMG’s global organisation, please visit https://home.kpmg/governance.

 KPMG International does not provide services to clients. No member firm is authorised to bind or contract KPMG International or any other member firm to any third party, just as KPMG International is not authorised to bind or contract any other member firm.

Scroll