The German fund industry association BVI has called on political parties to refrain from wielding the second Future Financing Act (ZuFinG II), just approved by the cabinet to boost venture capital (VC) and renewable energy infrastructure investments, as a “play ball” during a parliamentary process that could lead to approving the law before a snap election in February.
“It is good that the government has passed the Future Financing Act II. The draft law paves the way for more private funds for the [economic and financial] transformation in Germany,” a spokesperson for the BVI said.
He added: “Given the government’s lack of a majority in Parliament, it would be a shame if the issue became a political ‘play ball’ for the election campaign.”
This week the government approved the draft of the second Future Financing Act, after the first act passed by Parliament (Bundestag) on 17 November 2023, to improve the framework for venture capital investment through funds and Spezialfonds open only to qualified investors including pension funds.
The government lacks a majority to pass the law in Parliament after the liberal party (FDP) left the coalition with the social democrats (SPD) and the Greens.
The second Future Financing Act also aims to promote investments in renewable energy and infrastructure, significantly expanding investment options for funds, also through European Long-Term Investment Funds (ELTIFs).
The new rules create a legal framework that removes obstacles for investment in infrastructure and renewable energy projects, the cabinet said.
“The Future Financing Act II aims to strengthen Germany’s position as a financial centre,” said finance minister Jörg Kukies.
Occupational pensions association aba, the association of pension funds for professionals (Arbeitsgemeinschaft berufsständischer Versorgungseinrichtugen, ABV), and the association of municipal and church pension schemes (Arbeitsgemeinschaft kommunale und kirchliche Altersversorgung, AKA), representing over €600bn assets under management, back a reformed regulatory framework for fund investment in renewable energy and infrastructure, they said in a statement.
The associations have also proposed changes to the investment rule for pension funds to allow schemes to buy real estate funds investing in infrastructure projects.
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