German Mittelstandsanleihen FONDS: first steps have been taken to stabilise the fund; complaint proceedings with the Financial Market Authority in Luxembourg are underway; further strengthening of the investor community required.

On 14 June 2023, IPConcept S.A. surprised the market with its decision to liquidate the German Mittelstandsanleihen FONDS. The investors had not been informed of the decision beforehand. IPConcept S.A. did not make any provisions for the further management of the fund's assets. In particular, it was not ensured that the urgently needed risk management would continue to take place. Market participants see this as an unprecedented solo act on the part of IPConcept S.A. and the depositary DZ Privatbank S.A., which has caused bewilderment and head-shaking.

The resistance of the investors that formed as a result is beginning to have an effect. Dr Wolfgang Schirp, Berlin, whose law firm represents more than 100 private and institutional investors in the fund, says:

"Our energetic advocacy on behalf of the investors is having an effect. All the institutions involved that we are talking to are aware that great damage is imminent if a fund can be suddenly closed from one day to the next without valid justification and advance warning. This does not only affect this fund and its investors. Rather, confidence in the Luxembourg financial centre as a whole is at risk. In the talks we have had so far with the liquidator and his associates, we have received assurances that a fire sale of the fund's assets will not take place. Risk management with regard to the fund's assets will also be resumed immediately. We very much welcome both assurances. This ensures that no assets of the fund will be squandered and that no further damage will be caused."

Dr. Wolfgang Schirp continues: "However, these immediately effective security measures can only be a start. We have also initiated a formal complaint procedure for our clients with the Luxembourg financial market supervisory authority CSSF. In the course of the complaint procedure, all previous procedural steps will be fully clarified and examined for their legality. If there are indications of misconduct on the part of IPConcept S.A. and DZ Privatbank S.A., then we will assert claims for damages against these two institutions on behalf of our clients."

Further strengthening of the investor community is expressly desired. Dr. Schirp: "In our discussions so far, we have gained the impression that not only legal and commercial aspects are important. Rather, it is important to make the significance of the transaction for the Luxembourg financial centre visible in its entirety. We call on all investors who have not been represented so far to join our initiative."

For further information, please contact: Dr. Wolfgang Schirp, Schirp & Partner Rechtsanwälte, Leipziger Platz 9, D - 10117 Berlin, Tel. 0049-30-3276170, mail: schirp@schirp.com, URL: www.schirp.com