The category of semi-professional investors was introduced to create more flexibility in German investment law and to create new opportunities, especially for family offices, foundations and wealthy private individuals who do not meet the strict criteria of professional investors.
Here are some key features of semi-professional investors under the KAGB:
Commitment Amount: Semi-professional investors are required to make a minimum commitment of €200,000. This minimum commitment serves as a threshold to ensure that semi-professional investors have a certain level of wealth or financial resources.
Written Confirmation: The investor must confirm in writing that they are aware of the risks associated with the intended commitment.
Expertise and Experience: The management company must verify and confirm that the investor has the necessary knowledge and experience to comprehend the risks associated with the investment.
Waiver: The semi-professional investor must explicitly waive the protections provided to retail investors.
Cooling-off Period: The investor has a right to withdraw from the contract within a period of two weeks after conclusion of the contract.
This classification enables investors who don’t qualify as professional investors but who want to make substantial investments and are aware of and willing to accept the risks associated, to have more investment options, including those which might not be available or suitable for typical retail investors.
But as they don’t have the same level of presumed expertise or resources as professional investors, there are still some added protective measures for semi-professional investors, though not as many as for retail investors.
