BaFin Circular 12/2026 (WA) – Authorisation Procedure for AIF Management Companies under Section 22 KAGB

Purpose and Scope

The circular specifies BaFin's administrative practice regarding the authorisation application under Section 22 (1) KAGB and replaces the guidance notice of 24 March 2025, effective upon publication. It applies uniformly to internal, external, and already-registered AIF management companies (AIF-KVGs).

Own Funds and Liquidity (Section 25 KAGB)

Newly established companies must evidence initial capital by means of a bank confirmation (paid in, unencumbered, freely disposable); existing companies must provide a timely auditor's confirmation instead. Where fund-volume-dependent or cost-dependent additional own funds requirements apply (Section 25 (1) No. 2, (4) KAGB), the same confirmation must cover the aggregate amount. For professional liability risks under Section 25 (6) KAGB, companies may choose either additional own funds (also subject to confirmation) or insurance coverage in accordance with the AIFM Level 2 Regulation. Where ancillary services under Section 5 (2) KAGB are provided, the required initial capital increases in tiers to EUR 37,500 or EUR 150,000. Liquid assets under Section 25 (7) KAGB must be evidenced by current bank balance confirmations.

Managing Directors (Sections 23, 25 KAGB)

At least two full-time managing directors are required, typically with clear allocation of responsibility for portfolio management and risk management respectively. BaFin emphasises the principle of collective responsibility: all managing directors must demonstrate a basic understanding of portfolio management, risk management, and regulatory requirements — irrespective of internal allocation of duties. Where specific types of assets are to be managed, professional suitability for those specific assets must be substantiated in the CV; where responsibility for portfolio management is split among several managing directors, this must be clearly documented in the organisational chart. Important practical note: experience gained at a registered KVG may not be sufficient to qualify as managing director of a fully authorised KVG, particularly with regard to risk management.

Ownership Structure and Group Structure (Sections 1, 22 KAGB)

Holders of significant participations (Section 1 (19) No. 6 KAGB) must be disclosed; where these are legal entities, information on the reliability of their managing directors/shareholders is also required. A complete group structure chart must be submitted, which simultaneously serves as evidence of close links (Section 1 (19) No. 10 KAGB).

Business Plan (Section 22 (1) No. 7a KAGB)

Required elements include projected balance sheets/P&L statements for three years, a description of business activities and organisation, internal control procedures, an audit plan (in line with KAMaRisk), and an organisational chart demonstrating complete functional separation between portfolio management and risk management up to management board level — including in cases of deputisation. The planned AIF types must correspond to the company's stated corporate purpose; for closed-ended AIFs, orientation towards the catalogue in Section 261 KAGB is expected.

Further Key Practical Points

Delegation arrangements must comply with Section 36 KAGB in conjunction with Articles 75–82 of the AIFM Level 2 Regulation and KAMaRisk item 10; full delegation of portfolio or risk management does not relieve the company of the obligation to maintain professional suitability of its managing directors and to effectively control the delegate (Section 23 No. 10 KAGB). Already-registered KVGs do not benefit from the reduced completeness requirements under Section 22 (3) KAGB and must submit complete documentation. External AIF-KVGs are required to establish a supervisory board or advisory board, whose appointment must be notified at the latest upon granting of authorisation.

Recommendation for Market Participants: Applicant AIF-KVGs should prepare all required evidentiary documents (own funds confirmations, business plan, organisational chart with functional separation) early and in full accordance with the detailed requirements specified in Section 2, in order to avoid queries and delays in the authorisation process — in particular, the professional suitability of managing directors for the specific asset types to be managed should be discussed with BaFin at an early stage. Already-registered KVGs seeking full authorisation should further note that no completeness relief applies to them, and that experience gained under a registration — particularly in risk management — may not be sufficient to demonstrate the suitability of their managing directors for a fully authorised KVG.