Interim fund management in a service KVG

When the head of fund management in a service KVG drops out, the resulting gap cannot simply be left open. A German real estate special fund keeps running: deadlines, approvals, reporting, service provider management. A Munich real estate service KVG bridged this phase with an interim fund management mandate – for a fund with international holdings under the regulatory framework of the German Capital Investment Code (KAGB).

Starting position

The mandate covered a real estate special fund with international holdings and layered participation and holding structures. In the service KVG model, portfolio and asset management sit with external partners – but the regulatory responsibility remains with the KVG.

That constellation imposes particular demands: steering happens largely through third parties, yet must be demonstrably compliant at all times with the KAGB, the fund rules and the outsourcing agreements. An unfilled leadership function here is not merely a capacity issue but a supervisory one.

The brief

The mandate combined technical leadership of the unit with hands-on involvement in day-to-day operations:

• Technical leadership of the fund management unit alongside operational involvement
• Operational fund steering at service KVG level, taking account of the outsourced functions
• Ensuring proper administration of the special AIF in coordination with external portfolio and asset management
• Ongoing monitoring of the international portfolio across its participation and holding structures
• Coordinating and supervising external service providers: property managers, depositary, valuers, local legal and tax advisers
• Ensuring regulatory compliance and supporting reporting, risk and liquidity processes
• Supporting transactions from the KVG perspective including internal approvals and documentation review
• Developing the fund structure and optimising processes and governance

Interim fund management in practice

Map the obligations first

The starting point was not the portfolio but the obligations: which deadlines are running, which approvals are outstanding, which evidence is due, what do the outsourcing agreements actually govern? In regulated structures this stocktake is the precondition for every subsequent decision.

Lead outsourced functions actively

Outsourcing means steering, not surrendering. The external partners – portfolio and asset management, property managers, depositary, valuers – were managed through defined reporting lines and dates, with clear expectations on content and deadlines. Where deliverables fell short, the response was to steer rather than to rework.

Keep international structures in view

Where holdings span several jurisdictions through holding structures, the risk sits in the layers between: local tax matters, shareholder resolutions, distribution mechanics, currency and liquidity questions. Monitoring was therefore run at structure level, not only at asset level.

Support transactions from the KVG perspective

On acquisitions and disposals the KVG does not review commercial merit alone, but compatibility with the fund rules, completeness of documentation and adherence to internal approval processes. That role was carried throughout – alongside day-to-day operations.

How interim differs from a permanent appointment

An interim mandate in this function follows a different logic from a permanent appointment. Induction time largely falls away – the expectation is to be operational within days. In exchange, the long horizon is missing: decisions with effects over years are prepared and made ready for decision, but as a rule not taken alone; they are agreed with management and committees.

The scope of the mandate should reflect this. A clear split has proven effective: day-to-day operations and regulatory obligations fully within the interim remit, strategic direction-setting by contrast as a recommendation. That separation protects both sides – the institution from commitments made without lasting accountability, the interim manager from decisions whose consequences they will not be there to see through.

Outcome

The mandate covered both overall leadership of the unit and active involvement in operational fund management. The result was an efficient organisation, regulatory certainty and further development of the internationally oriented portfolio – including improved processes and governance structures that outlast the mandate.

What fund managers take from this

• Vacancies in regulated functions are a supervisory risk. Fast, qualified cover is usually the cheaper option.
• Outsourced functions need active steering. Responsibility does not travel with the task.
• Interim mandates should leave processes behind. Governance improvements outlast the vacancy.

The profile this mandate requires

What was required was KAGB confidence, experience in fund management with international holdings, and leadership experience in a regulated organisation. Plus the ability to be operational within days – this role offers no induction period.

Interim managers with this profile are scarce and are placed deliberately. Our process shows how a placement works; the fields we cover are listed under services.

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