Amendments to the Investment Ordinance (AnlV): more infrastructure, risk capital and flexibility

The German version of this article is available here.

The government’s draft bill of the 2nd Company Pension Strengthening Act of 18 September 2024, which also provides for changes to the Investment Ordinance (Anlageverordnung, AnlV), was on hold after the collapse of Germany’s coalition government in November 2024. However, on 5 February 2025, the Federal Ministry of Finance (Bundesministerium der Finanzen, BMF) announced at surprisingly short notice that the amendments to the AnlV would come into force independently. The 8th Amendment Ordinance to Ordinances under the Insurance Supervision Act (Versicherungsaufsichtsgesetz, VAG) was published in the Federal Law Gazette the next day, on 6 February 2025, and has been applicable since 7 February 2025. The amendments proposed in the government draft bill of the 2nd Company Pension Strengthening Act were adopted unchanged. The AnlV specifies the qualitative and quantitative requirements for the investment of the guarantee assets (Sicherungsvermögen) of small insurance companies, death benefit and pension schemes (Sterbe- und Pensionskassen) and also applies to numerous pension funds (Versorgungswerke) through references in the corresponding state law regulations. A hearing of industry associations had already been held on the 2nd Company Pension Strengthening Act, so further consultation of industry associations was no longer required.

In this blog post, we explain and contextualise the few but significant changes to the AnlV, which are expected to have a major impact on the investment activities of investors subject to the AnlV, particularly with regard to infrastructure investments:

• Infrastructure investments: Introduction of an infrastructure quota (Infrastrukturquote), extension of the eligible assets for private equity funds and other relevant developments in infrastructure investments (1.);
• Increase of the risk capital investment quota (Risikokapitalanlagenquote) (2.); and
• Use of the waiver clause (Öffnungsklausel) to exceed diversification limits (3.).

1. Infrastructure investments

a. Introduction of an infrastructure quota 

The most frequently discussed amendment to the AnlV concerns the introduction of a separate infrastructure quota (Infrastrukturquote) of the guarantee assets (Section 3(7) AnlV). Previously, infrastructure investments were allocated to other portfolio composition quotas (Mischungsquoten) in accordance with Section 3(1) to (6) AnlV, depending on the specific structure of the investment. For example, they were counted towards the quota for risk capital investments (Risikokapitalanlagen) in accordance with Section 3(3) sentence 1 AnlV or real estate investments (Immobilienanlagen) in accordance with Section 3(5) AnlV. However, these quotas were often exhausted due to the increasing allocation of institutional investors’ guarantee assets to alternative investments. The introduction of a separate infrastructure quota aims to increase the attractiveness of this asset class and promote the politically desired infrastructure investments by the companies concerned, preventing them from competing with other investments under the existing portfolio composition quotas (government draft, p. 43)

The government draft of the 2nd Company Pension Strengthening Act clarified that the new infrastructure quota does not generally limit the investment of the guarantee assets in infrastructure to 5%. Rather, infrastructure investments continue to be eligible for allocation to other composition quotas, in accordance with the eligible asset classes pursuant to Section 2(1) AnlV. Consequently, infrastructure investment do not necessarily have to be counted towards the infrastructure quota, neither generally nor as a priority.

The new quota applies to "direct and indirect investments for the financing of infrastructure projects" that are permitted under section 2(1) AnlV and serve the “construction, expansion, renovation, maintenance, provision, holding, operation or management of infrastructure” (section 3 (7) sentence 2 AnlV). Therefore, infrastructure investments must first qualify for one of the categories listed in Section 2(1) AnlV. If infrastructure investments are made indirectly via an alternative investment fund, for example, they must still comply with the restrictions applicable to open-ended special AIFs pursuant to section 2(1) no. 16 AnlV, private equity funds pursuant to section 2(1) no. 13(b) AnlV, real estate funds pursuant to section 2(1) no. 14(c) AnlV or alternative investment funds pursuant to section 2(1) no. 17 AnlV. 

The list of the various forms of potential infrastructure investments in section 3(7) sentence 2 AnlV should be interpreted broadly in light of the amendment to the explanatory memorandum to the government draft, so that all investment structures serving to finance infrastructure should fall under the new composition ratio. First, the reference in the ministerial draft stating that both equity and debt instruments are included was deleted (ministerial draft, p. 37). This clarification was unnecessary, as both types of instruments undisputedly constitute "financing," and the reference could have led to misunderstandings. Secondly, the government draft removed the explanation contained in the ministerial draft that (only) assets serving the general public interest, where the project operator is domiciled in a state in accordance with the respective asset class of Section 2(1) AnlV and where the infrastructure is located in that state, would qualify (ministerial draft, p. 37). Some associations had pointed out the risk that this wording could unnecessarily restrict investment opportunities. As a result, any location requirements now exclusively derive from the applicable provisions of Section 2(1) AnlV.

Finally, the government draft confirms that investments for the financing of infrastructure within the meaning of section 3(7) AnlV that are held in an open-ended special AIF can be counted towards the infrastructure quota (government draft, p. 43). In doing so, the legislator responded to a request from the German fund association (BVI statement, p. 4), which had pointed out that real asset funds in the form of open-ended special AIFs with fixed investment conditions in accordance with section 284 of the German Capital Investment Code (Kapitalanlagegesetzbuch, KAGB) with a focus on real estate and ancillary investments in infrastructure were not covered by the new infrastructure quota. According to the previously applicable administrative practice applicable to section 2(1) no. 16 AnlV (see German Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht, BaFin), Capital Investment Circular, B.4.13), such funds could not have benefited from the new infrastructure quota in accordance with Section 3(7) AnlV. Instead, infrastructure investments included in such real asset funds would have been counted toward the quota for alternative investments in accordance with Section 3(2) No. 2 AnlV.

b. Extension of the eligible assets for private equity funds (section 2 (1) no. 13b) AnlV) 

Furthermore, the BMF confirms the already established supervisory administrative practice of recognizing shares or stocks in private public partnership (PPP) project companies (ÖPP-Projektgesellschaften) and infrastructure project companies (Infrastruktur-Projektgesellschaften), listed in section 261 (1) no. 2 KAGB, as eligible assets for private equity funds according to section 2 (1) no. 13 b) aa) AnlV, in addition to the assets listed in section 261 (1) no. 4 KAGB – investments in companies that are not admitted to trading on a stock exchange or included in an organised market. As the Investment Ordinance did not formally permit this until now, the reference to section 261(1) no. 2 KAGB is added in section 2(1) no. 13(b)(aa) AnlV. In doing so, the BMF also addressed a request from the BVI (BVI statement, p. 3).

c. Other relevant developments

Infrastructure investments are gaining increased attention in the context of infrastructure special funds under the KAGB, which were introduced by the Fund Location Act (Fondsstandortgesetz) on 2 August 2021. In this context, BaFin's FAQs on special infrastructure funds, published for consultation on 20 December 2024, aim to provide supervisory clarifications on this fund vehicle. The consultation period ceased on 31 January 2025, publication of the final FAQs is expected in the coming months. These FAQs will have to be considered when interpreting the scope of eligible assets for private equity funds due to referenced to the KAGB.

In this context, it is also worth recalling the draft for discussion published on 21 May 2024 for a law promoting fund investments in renewable energies and infrastructure (see our Client Biefing), which provided for clarifications in the KAGB and the German Investment Tax Act (Investmentsteuergesetz, InvStG) on investments in infrastructure, as well as the amendments to the InvStG proposed in the government draft bill of a 2nd Future Financing Act (Zukunftsfinanzierungsgesetz, ZuFinG) of 27 November 2024 with regard to investments in renewable energies and infrastructure. These topics are not expected to be taken up again until after the upcoming federal elections and therefore in the next legislative period. According to their explanatory memorandum, these draft laws were also intended to create an attractive and reliable investment framework for indirect investments in renewable energies and infrastructure via investment funds.

2. Increase of the risk capital investment quota (Risikokapitalanlagenquote)

Finally, the risk capital investment quota (Risikokapitalanlagenquote) pursuant to Section 3(3) sentence 1 AnlV is increased from 35% to 40% of the guarantee assets. In particular, investments in company participations, listed stocks and private equity funds are counted towards this quota. According to the explanatory memorandum of the government draft, this is intended to increase the scope for investments by companies subject to the AnlV (government draft, p. 43). However, the quota for non-exchange-traded equity investments in the amount of 15% of the guarantee assets, which must also be taken into account for investments within the risk capital investment quota, remains unchanged. The government draft points out that, despite the extension of the quota, companies must continue to observe the principles set out in Section 1(3) and (4) AnlV, meaning that the expanded scope can only be utilised if the investment and risk management, the internal investment principles and the risk-bearing capacity of the respective company permit this.

3. Use of the waiver clause (Öffnungsklausel) to exceed diversification limits 

According to the so-called waiver clause or opening clause (Öffnungsklausel) of Section 2(2) AnlV, the guarantee assets can also be invested in assets that do not qualify as eligible assets pursuant to Section 2(1) AnlV, provided that the indispensable investment prohibitions of Section 2(4) AnlV do not apply. These investments are subject to a portfolio composition quota of 5% of the guarantee assets in accordance with Section 3(2) No. 4 AnlV, which can be increased to up to 10% of the guarantee assets with the approval of BaFin. In future, this waiver clause will also allow for assets to be acquired that do not meet the diversification requirements in accordance with Section 4(1) to (4) AnlV. The amendment therefore creates more flexibility with regard to investments with individual issuers or in individual assets, which, according to the government draft, should expand the possibilities for investing in assets with higher returns (government draft, p. 43). However, this change does not come with a higher allocation capacity for the waiver clause. The investments made within the scope of the waiver clause therefore remain limited to 5% or – with the approval of the supervisory authority – 10% of the security assets.

If you have any questions please reach out to: Prof. Dr. Wessel Heukamp, Andreas Ruthemeyer, Dr. David Schwintowski, Dr. Sebastian Röger, Dr. Theresa Kreft, Laura Druckenbrodt, Jonas Regener.