Third party marketing Germany investment fund market is one of the largest in Europe, offering international asset managers numerous opportunities to market their UCITS* and AIFs. For a successful market entry, a deep understanding of market structure, regulatory requirements, and effective distribution strategies is essential.

This article is aimed at sales decision-makers looking to expand their presence in the German market, making them aware of the most important points and highlighting the role of partnerships, e.g. with a Third Party Marketing (TPM) agency.

Attractiveness of the German Investment Fund Market

Germany is a key hub in the European investment landscape, with total assets under management (AUM) in UCITS and AIFs exceeding €2.7 tn. In 2024, UCITS net assets in Germany reached approximately €530.5 bn, while AIFs accounted for around €2.2 tn.

These numbers underscore the attractiveness of the market, with AIFs remaining popular among institutional investors, while UCITS are favoured by both private and institutional investors.

Equity funds hold a prominent position, with around €230 bn in assets, reflecting strong performance in the stock markets. Bond funds represent about €180 bn, catering to those seeking stable income despite market volatility. Multi-asset funds, managing approximately €120 bn, appeal to investors looking for a balanced approach across various asset classes​.

Market Structure of the German Market

Germany’s investment landscape is quite robust, with both private and institutional investors active. The pension provision sector plays a big role, with 50 mn private investors across 21 mn households in Germany actively investing in funds, as per Mordor Intelligence. According to the researcher, recent market drivers and opportunities include “evolving investor preferences, innovative financial products, and advancements in financial technology.”

As for the investor segments, these are the most significant:

Insurance Companies and Pension Funds: This segment dominates AIF investments, favouring long-term strategies and stable returns to meet their liabilities. They often seek AIFs that provide access to less liquid assets such as infrastructure and real estate.

Banks and Wealth Managers: They play a crucial role in distributing UCITS, serving both institutional and private clients with a broad range of investment products.

Private Investors through Distribution Platforms: While institutional investors account for the majority of AIF investments, private investors are a significant market for UCITS through banks and distribution platforms, often favouring liquid, low-cost options like ETFs.

Regulatory Requirements and Challenges

Entering the German market requires compliance with specific regulatory requirements overseen by BaFin (Federal Financial Supervisory Authority). When it comes to the mutual fund market, Germany’s integrated financial regulatory authority is overseeing the following, for instance:

Product Registration: UCITS benefit from an EU-wide passport, simplifying the registration process in Germany. AIFs, especially those from non-EU managers, face additional requirements, such as appointing a local representative or depositary.

Sustainability Requirements: The Sustainable Finance Disclosure Regulation (SFDR) places high transparency demands on ESG criteria disclosure. Both UCITS and AIFs must clearly outline how they meet sustainable investment goals, influencing how these products are marketed​.

The regulatory environment in Germany is complex but presents opportunities for those who can navigate it successfully. A knowledgeable Third Party Marketer (TPM) can provide valuable support in this area.

Your Path to Success in Germany

The German investment fund market offers significant potential for international asset managers aiming to position their UCITS and AIFs successfully. With FundFinity by your side, you’ll have an experienced partner to navigate regulatory challenges and connect with the right investors. Let’s start this journey together—unlock new opportunities in the German market with our tailored solutions. Reach out today, and let’s talk about how we can support your success!

In the meantime, explore more articles and services on our website to understand distribution strategies across the DACH region and see how FundFinity can support your business.