3 questions to smart minds

With the entry into force of the KAGB, new private equity funds — unless they are funds of a capi­tal manage­ment company (“KVG”) only regis­tered with BaFin — must be estab­lis­hed in the legal form of an invest­ment limi­ted part­ners­hip (“Invest-KG”) or invest­ment stock corpo­ra­tion (“Invest-AG”). In principle, the provi­si­ons of the German Commer­cial Code (HGB) are also appli­ca­ble to these Invest-KGs, but the German Invest­ment Code (KAGB), as a lex specia­lis, is to be applied with prio­rity. As a result, size-depen­dent relief opti­ons under the HGB, for example, cannot be taken advan­tage of.

Exclu­sive accoun­ting in accordance with the HGB now only applies to alter­na­tive invest­ment funds (“AIFs”) that are not Invest-KGs or Invest-AGs and that are also not cove­red by certain tran­si­tio­nal arran­ge­ments. These tran­si­tio­nal provi­si­ons relate in parti­cu­lar to public AIFs for which, in addi­tion to the German Commer­cial Code (HGB), the corre­spon­ding provi­si­ons of the German Invest­ment Code (KAGB) inclu­ding supple­men­tary provi­si­ons of the German Capi­tal Invest­ment Accoun­ting and Valua­tion Ordi­nance (“KARBV”) or the German Invest­ment Act (“VermAnlG”) apply.

With regard to the indi­vi­dual chan­ges, a distinc­tion must be made between new private equity funds, i.e. those already laun­ched under the appli­ca­tion of the KAGB, and private equity funds already exis­ting before the intro­duc­tion of the KAGB. — In the annual finan­cial state­ments of a “new” Invest-KG, the following items must be adjus­ted or expan­ded in compa­ri­son to the previous HGB finan­cial state­ments under the appli­ca­tion of the KAGB: 

• diffe­rent balance sheet structure
• Reco­gni­tion of an “unrea­li­zed result” in the income statement
• Appli­ca­tion of special valua­tion methods
• Expan­sion of the disclo­sures requi­red in the notes to the finan­cial state­ments under HGB
• Presen­ta­tion of a (profit and loss) utiliz­a­tion account
• Presen­ta­tion of a state­ment of chan­ges in equity
• Prepa­ra­tion of a manage­ment report (expan­ded compa­red with the HGB)

The appli­ca­bi­lity of the indi­vi­dual laws to the “old” private equity funds already exis­ting before the intro­duc­tion of the KAGB, on the other hand, is deter­mi­ned by various factors, such as the end of subscrip­tion (“final closing”) as well as the end of invest­ment acti­vity. The legal chan­ges lead to various exten­si­ons of the exis­ting repor­ting requi­re­ments under the German Commer­cial Code (HGB). The following posi­ti­ons must normally be added to the previous degree: 

• Acti­vity Report,
• Report on the remu­ne­ra­tion of the KVG
• Over­view of investments
• Infor­ma­tion on the total expense ratio accord­ing to KAGB

With regard to the annual finan­cial state­ments of a “new” Invest-KG, there is an obli­ga­tion to audit as well as to disc­lose within six months after the end of the finan­cial year. At the same time, the annual finan­cial state­ments must be submit­ted to BaFin.

If the VermAnlG applies to “old” private equity funds, the exten­ded annual finan­cial state­ments must be audi­ted and disc­lo­sed within nine months of the end of the finan­cial year. By contrast, if the HGB is applied with the corre­spon­ding tran­si­tio­nal provi­si­ons of the KAGB, no manda­tory audit of finan­cial state­ments will be requi­red in the future either. The size-depen­dent relief option for filing the balance sheet with the Federal Gazette also conti­nues to exist for these private equity funds. Howe­ver, in both cases, the (audi­ted) annual finan­cial state­ments must be submit­ted to BaFin immedia­tely after prepa­ra­tion and made avail­able to the public, for example. be made avail­able on the website of the respec­tive fund mana­ger (Alter­na­tive Invest­ment Fund Mana­ger, AIFM).