Up to now, German closed-end real estate funds have been regarded as being for private investors only — German private investors. And with fundraising falling the bell was tolling for the vehicle. That could well change soon: the product has made it on to the agenda of institutional investors — European institutional investors. Why? Because the German government has put AIFMD, the Alternative Investment Fund Managers Directive, into national legislation and created — almost casually — a new investment product: the closed-end Spezialfonds as a hybrid of the regulated closed-end fund and the, among institutional investors, very popular open-end Spezialfonds.

Although the product was put in place in summer 2013, the knight’s blow has now come with a further piece of new German legislation. On 25 February, the federal government issued an amendment to the Anlageverordnung (investment regulation) for insurance companies and pension funds. A stalemate that lasted for 19 m