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Supervision puts funds under pressure


The sun sets after a rainy day behind the Frankfurt skyline.
Picture: dpa

In order to remain liquid in crises, the companies should introduce new instruments. They make it difficult for investors to exit in order to prevent fund closures.

BThere were no threatening outflows of funds in the corona crisis for German fund companies. “So far, the German funds have come through the crisis relatively well,” says a spokeswoman for the financial regulator Bafin. Despite occasionally strong downward movements on the securities markets, only one retail fund had to temporarily suspend the redemption of units. She does not name names, but it is known that the Paragon UI of the Freiburg asset manager Greiff, in which Universal Investment acts as a capital management company, was closed for four weeks.

Although the funds have weathered the crash well, Bafin is increasing the pressure on the investment companies to implement the legal options for liquidity management as quickly as possible. For fund investors, this means that they can no longer get out of investment vehicles quickly in times of crisis or only at unfavorable prices.

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