Master-KAG

The German market for institutional asset management continues to grow. German asset managers are facing intense international competition, not only in the retail sector but also with respect to institutional business.

One of the key drivers of this development is the so-called “Master-KAG”. Through a Master-KAG, a foreign asset manager can manage a German fund without the need to establish its own German investment management company.

The diagram below shows how (foreign) asset managers may cooperate with German Master-KAGs:

In this market segment, we clearly focus on advising foreign asset managers that require assistance for their negotiations with German Master-KAGs. While the documentation of Master-KAG contracts has been standardised by the German Investment Management Association, each Master-KAG has its own preferences regarding liability provisions, internal audit requirements etc. Also, the operating memoranda and investment guidelines require close legal scrutiny, as they are different for each mandate.

We have assisted dozens of clients in their negotiations of Master-KAG agreements. We are therefore experienced in the standard agreements used by all major Master-KAGs and know their negotiating positions.

Further details on this topic can be found in the attached client briefing “The Master KAG in German Asset Management”.