Financial Services Investment Funds & Alternative Investments

What is Luther.Solutions?

Luther.Solutions supports the transformation of legal departments at every stage – from strategic dialogue to process and organizational design, including the implementation of legal tech. Interdisciplinary teams and proven methodologies ensure measurable improvements in quality, efficiency, and transparency in day-to-day operations as well as in complex mandates.

Financial Services
Investment Funds & Alternative Investments

The Financial Services, Investment Funds & Alternative Investments team primarily advises credit and financial services institutions, asset management companies and depositaries, asset managers and fund initiators as well as institutional investors (e.g. insurance companies and professional and other pension funds) and wealth managers (e.g. trusts and family offices) in the areas of alternative investments, individual and collective asset management, investment and insurance supervisory law as well as on all aspects of banking and financial services supervisory law.

Our lawyers have many years of experience, a very high level of specialisation and a large number of references in their respective areas of expertise.

These expertise include, in particular, advising asset managers and fund initiators on the structuring and setting-up, management and distribution of alternative investment funds in Germany and Luxembourg as well as on securitisation structures related to alternative investments. We also advise institutional investors on investing in complex alternative investment products and on the structuring of their own investment platforms. At the same time, we support our clients with regard to all regulatory issues, especially in investment supervisory law (German Capital Investment Code (KAGB) and German Investment Act (VermAnlG)), insurance supervisory law (Solvency II Directive/German Insurance Supervision Act (VAG), IORPD II Directive and German Investment Regulations (AnlV)/German Pensions Fund Supervision Directive (PFAV)), securities supervisory law (MiFID/German Securities Trading Act (WpHG), EMIR and EU Prospectus Regulations) as well as banking supervisory law (CRR, German Banking Act (KWG) and German Payment Services Supervision Act (ZAG)).

Our Financial Services, Investment Funds & Alternative Investments team is familiar with the regulatory implementation of all the relevant advisory areas and the current market environment and standards. Our advice is consistently focused on your business interests and designed for your needs from the outset. To this end, we work with you to develop and design appropriate and tailored strategies and structures, whether locally or internationally oriented. We provide this advice taking into consideration the relevant economic and regulatory aspects.

Our clients face complex legal and operational challenges due to the regulation of the financial market by legislators and supervisors. Hardly any other area is characterised by the dynamic developments of the regulatory frameworks at global, European and national levels as that of financial market supervisory law. In order to keep up with these developments, our Financial Services, Investment Funds & Alternative Investments team, with its excellent connections to the regulatory authorities and industry associations, can provide its services to you as a competent partner.

As part of an integrated practice, the Financial Services, Investment Funds & Alternative Investments team also advises on German investment tax law, for example on the tax structuring of fund structures and other investment structures. The implementation of licensing procedures for financial intermediaries, drafting contracts and dealing with distribution issues also belong to our advisory spectrum.

Due to the importance of Luxembourg for numerous German and international investors and asset managers, the Financial Services, Investment Funds & Alternative Investments team can, if required, also include in the process experienced colleagues from Luther’s Luxembourg office, which has over 25 professionals. Therefore, clients who are in need of advice in Germany and Luxembourg can be provided with integrated advice from a single source. In addition, we also have access to a network of international partners with whom we cooperate.

Our services

Establishing/authorisation, acquisition and restructuring of asset management companies, depositaries and financial services institutions, including regulatory assessment of target operating models
Capital and liquidity requirements
Outsourcing of services and regulatory obligations (in particular EBA Guidelines on Outsourcing Arrangements)
All governance requirements for initiators, asset management companies, depositaries and institutional investors, including remuneration schemes
General organisational requirements (e.g. operational procedures, internal manuals/policies, codes of conduct)
Requirements for the compliance function of financial intermediaries (especially the Minimum Compliance Standards (MaComp)), risk management (Minimum Requirements for Risk Management (MaRisk)/Minimum Requirements for Risk Management for Asset Management Companies (KAMaRisk)) and IT (e.g. German Supervisory Requirements for IT in Financial Institutions (BAIT))
AML/KYC requirements for asset managers, investors and asset management companies
Implementing regulatory projects and developments (regulatory transition/change projects), e.g. Digital Operational Resilience Act
Extended workbench of the legal departments of asset management companies and asset managers: support with the day-to-day business for all legal issues that may arise

Regulatory advice regarding capital investment for Solvency II and German Investment Regulation (AnlV) investors
Fund due diligence taking into account investor-specific requirements under insurance, investment, corporate and tax law as well as with regard to internationally recognised market standards (e.g. ILPA principles)
Assessing whether an acquisition is permitted under investment law

Notification procedures (EU passporting) and solutions for cross-border distribution issues
Inbound and outbound distribution of fund units both within and outside the EU according to AIFMD/MiFID II
Providing advice to placement agents and financial investment brokers, including drafting agreements

Structuring funds (including selecting the investment fund vehicle, choice of legal form of a company, management structure, remuneration model), managed account solutions and other individual investment platforms, such as alternative fund access via securitisation structures, socalled fund linked notes (including assisting with the rating process)
Advising on product-related and company-related licensing and registration procedures with the German Federal Financial Supervisory Authority (BaFin) and the Commission de Surveillance du Secteur Financier (CSSF)
Comprehensive strategic and regulatory advice on investment vehicles in all alternative asset classes (e.g. real estate, infrastructure, private equity, private debt, hedge funds, insurance linked strategies and collectibles)
Implementing service asset management company models, including outsourcing and advisory structures
Preparing articles of association and sales documentation (e.g. prospectuses and issue documents) as well as service and other agreements (including side letters) or accompanying documents (key investor information, investment information sheets, PRIIPS KID)
Advising on publication and information obligations as well as all governance requirements for initiators, asset management companies and depositaries
Restructuring and liquidating funds
Fund-related corporate, capital markets, distribution and competition law advice
Extended workbench for the legal departments of asset management companies and asset managers: support with drafting and amending fund documentation, taking on extensive documentation amendment projects.

Structuring of investments taking account of the different types of legal entities, national and international tax regimes at the fund and investor level
Comparisons of tax burdens, comparative tax calculations and “most favourable tax treatment“
Classification of funds (real estate, mixed and equity funds) including quota calculation and status certificates
Tax comparisons of legal types
Structuring of fund investments with respect to issues regarding income attribution rules (controlled foreign company legislation), other issues regarding the AStG, double taxation agreement (DTA) eligibility and exemptions, ATAD (EU Anti-Tax Avoidance Directive) and DAC 6 (EU Directive on Administrative Cooperation) issues
DAC 6/Mandatory Disclosure Regime (MDR) classification and reports
Review of eligibility of Sectoin 2 and Section 3 funds with regard to investment tax treatment
Comprehensive support provided to closed-end funds and their investors in determining the tax assessment bases and in meeting tax reporting obligations (including uniform and separate returns)
Determination of taxable fund income and its inclusion at the investor level
Determination of equity gains and DTA profits
Comprehensive support provided on tax audits and in the case of opposition or legal proceedings

Requirements for digitalisation strategies for asset managers and institutional investors
Digital products and services (e.g. tokenisation, crypto AIFs/depositary business, FinTech)
ESG requirements and sustainability strategies for asset managers and institutional investors, including sustainability investments
Implementation of regulatory projects relating to cybersecurity (Digital Operational Resilience Act)

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