Fund manager

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Fund manager is the profession exercising the function of fund management , which, as an asset manager, deals in particular with the portfolio management of a portfolio at investment companies .

General

As portfolios come mainly equity funds , alternative investment funds , fund of funds , ethical funds , film funds , guarantee funds , money market funds , hedge funds , real estate funds , open-ended property funds , property funds , index funds , infrastructure funds , fixed-term funds , media funds , balanced funds , bond funds , ship funds , special funds or forest fund in question. These portfolios require portfolio management, which is specifically referred to as fund management for investment funds . Fund management is a function in the organizational structure of an investment fund and pursues the corporate goals of the fund company. According to the requirements of BaFin , the fund management includes the organizational unit or the employees who make investment decisions for the investment funds. The fund management extends exclusively to the investment assets or special assets of an investment fund.

Investment companies are heavily regulated and must in particular observe the provisions of the Capital Investment Code (KAGB), which have a direct impact on fund management.

tasks

The fund manager is ideally a qualified financial analyst . Its tasks are market observation, especially of the financial markets , market analysis and asset allocation , which usually leads to buying, selling or holding individual financial instruments (especially securities ) using a benchmark . When selecting the individual securities, he has to take into account issuer , sector and country limits . When allocating investments, care must be taken to ensure good risk diversification with an acceptable risk mix due to high granularity with an acceptable concentration of risk . The fund manager observes the specified investment strategy , analyzes the leverage effect of the investment fund and the extent to which this leverage is secured ( Section 29 (4) KAGB). The fund manager is obliged to monitor the overall performance in order to ensure sustainable performance of the investment fund.

Legal issues

The fund management is bound by the legal obligations that the KAGB imposes on the capital management company . According to § 26 para. 2 KAGB must therefore fund managers of their work "honestly, with due skill , care and diligence and in good faith to pursue, in the best interests of its management designated investment fund or the investors of investment assets and the integrity of the market act". They must also take all reasonable steps to avoid conflicts of interest and - where these cannot be avoided - to identify, resolve, monitor and, if necessary, disclose such conflicts of interest, have the means and procedures necessary for proper business activity and use them effectively the conduct of its business activities comply with applicable regulatory requirements in order to promote the best interests of the investment funds it manages or of the investors in these investment funds and the integrity of the market and to treat all investors in the investment funds fairly. Section 27 of the KAGB gives precise instructions on how to deal with conflicts of interest. According to Section 28 (1) No. 4 KAGB, in particular, suitable regulations must be made for the investment of the capital management company's own assets. Due to the separation of functions , the risk controlling to be set up must be hierarchically and functionally independent of the fund management in accordance with Section 29 Paragraph 1 KAGB. According to Section 29 (2a) of the KAGB, when assessing the credit quality of the investment fund's assets, fund management may not rely exclusively or automatically on ratings issued by a rating agency . However , if the rating of an asset falls below investment grade , the fund manager is obliged to sell it.

In the case of investment decisions that have a significant impact on the risk profile of the investment fund, the risk control department must be involved in advance; The respective fund manager must have adequate knowledge of the utilization of the internal limits before each transaction for an investment fund. The fund management is then only allowed to make investment decisions within the specified risk limits.

Since alternative investment funds generally do not have an economic life of their own, the fund managers of these funds have been identified as a unit to be regulated. These are called alternative investment fund managers (short AIFM , of English Alternative Investment Managers ), respectively. Alternative mutual fund managers are legal entities whose job it is to manage alternative mutual funds. These AIFM fund managers require a Europe-wide license from BaFin for fund management.

Risk mix

Investment companies are subject to the principle of risk diversification , which the KAGB calls risk diversification . According to Sections 192 ff. KAGB, there are provisions on permissible assets, the prohibition of short selling ( Section 205 KAGB), issuer limits of up to 5% or 10% of the investment assets ( Section 206 KAGB, Section 210 KAGB) and principles of risk diversification ( Section 110 (2) KAGB, Section 214 KAGB, Section 243 KAGB, Section 262 KAGB).

Duties

When making a decision, the fund manager not only has to observe the development of the stock exchanges with the necessary care , but is also bound by the fund's investment conditions and principles and statutory provisions.

Due diligence

The main general duty is the duty to manage the investment fund with the diligence of a prudent businessman in the exclusive interest of the shareholders and with the aim of achieving increases in value or reliable income . The fund manager is given considerable leeway in making decisions ( Business Judgment Rule ), unless, with regard to the specific decision-making situation, the interests of investors in maintaining profitability or with regard to certain situations, e.g. B. If there is a risk of insolvency, the obligation to act carefully is specified. The courts may not substitute their own judgment for the fund manager's commercial judgment , even if it subsequently turns out that a commercially reasonable or justifiable decision has had an adverse effect. Financial risks are inevitable; not entering into it, but rather avoiding it, can under certain circumstances be reproachable. The decisive factor is therefore not the damage to the fund as such, since the fund always bears the investment risk. What is decisive, however, is the neglect of the necessary care when preparing and controlling the decisions or when monitoring the investment, since bad investments cannot be avoided, but their frequency and potential for damage can be reduced through care and control.

Loyalty Duty

In addition, there is the duty of loyalty and protection of interests in the exclusive interest of the shareholders. Conflicts of interest must be avoided and the integrity of the market must be preserved.

Duty to reduce risk

In particular, bans on short selling and the investment rules for avoiding excessive risks and for risk diversification in the rules on the use of derivatives , the rules on the permitted investment objects and the obligations to diversify risk serve to protect the interests of investors . As a rule, no more than 5 percent of the fund's total assets may be invested in securities from one issuer.

Information obligation

The requirement of complete and correct investor information requires the availability of a sales prospectus with contractual conditions free of charge for the investor , the publication of annual and semi-annual results and the regular calculation and publication of the unit prices in accordance with the fund's contractual conditions before units are sold .

confidentiality

The secrecy and maintenance of confidentiality by the fund employees in accordance with the relevant regulations on banking secrecy and the provisions of the second Financial Market Promotion Act on the confidentiality of price-sensitive facts.

Separate administration obligation

The obligation to separate administration through the commissioning of a suitable custodian , together with the fiduciary control function of the custodian, prevents an amalgamation of assets.

liability

The unlawful and culpable acting in accordance with the above provisions in connection with the provisions on the employment contract ( § 675 BGB , § 611 ff.BGB in connection with the provisions of § 325 , § 326 BGB) are liable for the damage resulting from the breach of duty to the investment fund . The liability for damages always presupposes a breach of an obligation. A fund manager is not solely liable for failure under German or foreign law.

For the external offense of a breach of duty, the fund manager must be at fault , i. H. a violation of the so-called "internal diligence" is added. There is no relief from liability for the fault of the fund manager, i. In other words, they are responsible for intent and any negligence.

It is not the subjective skills that are decisive, but the standard of a “prudent and conscientious fund manager” determines the level of skills and effort that the fund manager must muster in order to fulfill his duties, i. In other words, breaches of these obligations regularly trigger liability and an appeal to a lack of culpability, e.g. ignorance of the individual obligation, does not usually relieve the burden.

Liability to Shareholders

Every investor can expect legal fund management from the fund manager. The depositary is obliged to assert possible claims for damages on his behalf. In the event of inaction, a direct claim by the shareholder against the fund manager or depositary or an analogous application of the regulations of the Actio pro socio is conceivable.

Liability to the state

According to the KAGB, the fund manager is under state supervision and has to report regularly. In the event of a breach of duty, the state can temporarily or permanently prohibit business and also impose fines.

insurance

An insurance or pension obligation exists only for fund managers of alternative funds in accordance with § 25 para. 6 and para. 8 KAGB. There is nothing to prevent the companies from insuring their liability and paying the premiums. Various insurers have developed the coverage concept of a fund manager insurance , although mostly the depositary's claim against the fund manager is not insured and furthermore there is no cover for intent. The insurance density is currently still very low.

Of course, not having this type of insurance with investment funds can not be detrimental to investors. The investment funds are not insolvent , because they belong to § 99 not para. 3 sentence 2 KAGB the bankruptcy estate capital management company. The investor protection is therefore guaranteed investment law and requires no separate deposit insurance . If the right of the capital management company to manage a special fund expires (e.g. due to its insolvency ), then pursuant to Section 100 (1) KAGB - if the investment fund is owned by the capital management company - the fund is transferred to the depositary or - if it is jointly owned by the investors stands - the right of administration and disposal of the fund is transferred to the depositary. The depositary has the fund handle and distribute to investors (§ 100. 2 KAGB).

However, this only covers the issuer risk of the investment company; however, the investor bears the usual financial risks, in particular the price risk or interest rate risk of his investment certificates .

Web links / literature

Individual evidence

  1. ↑ BaFin circular of January 10, 2017, 01/2017 (WA) - Minimum requirements for the risk management of capital management companies - "KAMaRisk" , p. 16
  2. ^ Alfred BJ Siebers / Martin Weigert (eds.), Börsen-Lexikon , 1998, p. 215
  3. ↑ BaFin circular of January 10, 2017, 01/2017 (WA) - Minimum requirements for the risk management of capital management companies - "KAMaRisk" , p. 17
  4. ↑ BaFin circular of January 10, 2017, 01/2017 (WA) - Minimum requirements for the risk management of capital management companies - "KAMaRisk" , p. 25
  5. ↑ Article 3 of the directive