Investmentgesellschaft

An Investmentgesellschaft (investment company) is a legal entity that pools capital from multiple investors to invest in a diversified portfolio of financial assets and other investments. Its purpose is to provide professional asset management, diversification, and access to markets that individual investors may find difficult to achieve alone. The vehicle can take various forms, including corporations, limited liability structures, or fund vehicles that issue shares or units to investors.

Two common forms are open-ended and closed-ended investment companies. Open-ended funds continuously issue and redeem shares at the fund’s net asset value, providing liquidity to investors. Closed-ended funds raise capital through an initial offering and then trade on secondary markets, with share prices that may differ from the underlying NAV. Other variants found in different jurisdictions include specialized funds and real estate funds, which may have distinct regulatory regimes and liquidity characteristics.

Regulation and oversight are central to investment companies. They are subject to financial-market rules aimed at investor protection, disclosure, diversification, liquidity, and risk management. In the European Union, regional frameworks such as UCITS commonly apply to retail funds, while national regimes regulate other fund types. Supervisory authorities, such as national financial regulators, supervise compliance, reporting, and governance standards, including the roles of fund managers, custodians, and administrators.

Functions and structure often involve an asset manager or fund manager, a management company, and a custodian. Investment companies may offer passive products (such as index-driven funds) and active strategies, with services including valuation, accounting, risk management, and investor reporting. They serve both retail and institutional investors seeking professional management and scale in asset allocation.