The capital management company (KVG), formerly known as an investment company or fund management company, manages certain investment funds.

KVGs have been subject to new regulatory requirements in Germany since July 2013. The meaning of the term was expanded in the German Capital Investment Code (KAGB) and simultaneously defined for open-ended and closed-ended investment funds.

With a few exceptions, all KVGs are subject to licensing.

• KVGs that manage funds are not subject to licensing,
  • whose thresholds do not exceed EUR 100 million in general or EUR 500 million if these funds have no financing leverage and no redemption rights within the first five years and
  • which are exclusively special funds for institutional investors.

Note:
These funds must be registered with the state supervisory authority.

A KVG is either an external KVG or an internal KVG.
An external KVG may only be licensed by BaFin in 3 legal forms:

• the AG,
• the GmbH or
• the GmbH & Co. KG.

The KVG must first have been commissioned by the fund's management board or managing director to manage the fund. If the management decides that no external KVG is to be appointed, the investment fund itself is to be regarded as an internal KVG.

AIF capital management companies are capital management companies that manage or intend to manage at least one alternative investment fund (AIF).
UCITS capital management companies are capital management companies that manage or intend to manage at least one undertaking for collective investment in transferable securities (UCITS).

You must submit the application for permission to operate a capital management company in writing to BaFin.