Economic theory in everyday life: Hedge funds

Abstract

Up to date any kind of hedge fund was legally forbidden in Germany. Likewise, the public distribution of shares in foreign hedge funds was prohibited within the framework of the so called 'Auslandsinvestitionsgesetz' (AuslInvestmG). In March 2004, it was 'DWS Investment' (the investment company of Deutsche Bank) that was the first German firm which was approved by the Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin) to distribute its products. Two major developments have promoted this change within the landscape of financial services and are therefore discussed in the following.Hedge funds; Germany