Funds of hedge funds face threat under new German law proposals

Funds investing in hedge funds could be faced with additional administration to avoid breaching restrictions imposed on them by recent proposals published by Germany's finance ministry, a Berlin tax expert says.

Christopher Martin, a lawyer with Wilmer Cutler & Pickering, said recent proposals for the Investment Modernisation Act (IMA) placed strict restrictions on funds investing in hedge funds. Umbrella funds may only invest in one hedge fund and at most 20% of their capital in any one target f