Select Page

Funds & Investment Management

Funds & Investment Management

Our London office at Holborn Gate, 330 High Holborn, London, WC1V 7QH, provides cross‑border advice to fund sponsors, managers, institutional investors and service providers on the regulation, structuring and distribution of investment funds operating in or from England & Wales. This note sets out practical considerations for fund formation, authorisation, tax and ongoing compliance in the UK market.

Regulatory framework and authorisation

The Financial Conduct Authority (FCA) regulates most fund managers and the marketing of fund interests to UK investors. Key issues when launching a fund include whether the manager needs FCA authorisation (or reliance on an existing authorised entity), the choice between an authorised fund (eg UCITS/OEIC) or an alternative investment fund (AIF), and adherence to the FCA’s conduct, prudential and client money rules. Cross‑border marketing into the UK requires careful analysis of UK marketing rules post‑Brexit and potential reliance on third‑country regimes or national private placement regimes.

Fund structures and tax considerations

Choice of vehicle materially affects governance, investor rights and tax treatment. Common onshore structures include limited partnerships for closed‑ended private funds and open‑ended structures such as OEICs for retail or pooled investment vehicles. Offshore structures remain common for certain international investor bases. Tax issues to consider early include investor tax residency, VAT on management and advisory services, income and capital gains treatment of the vehicle, and carried interest arrangements — all of which can affect fund economics and investor documentation.

Distribution, governance and ESG

Distribution strategy should align with investor targeting (retail v professional), disclosure obligations (eg PRIIPs, where applicable), and any product‑specific conduct rules. Governance expectations in the UK typically include an independent depositary/trustee for certain funds, robust valuation policies, risk management frameworks and detailed service agreements with administrators and depositaries. ESG and sustainability disclosure requirements are increasingly material; managers should map their fund’s strategy against FCA expectations and investor due diligence requirements.

Practical checklist for sponsors and managers

  • Decide target investor type and jurisdictions for marketing.
  • Determine appropriate legal vehicle (LP, OEIC, ICVC, offshore) and draft constitutional documents.
  • Assess whether manager requires FCA authorisation or can operate under an existing authorised manager.
  • Prepare regulatory applications, prospectus/KIID/IM and AML/KYC processes.
  • Obtain tax analysis covering vehicle, investors and carried interest.
  • Engage depositary, administrator, auditor and custody arrangements; ensure valuation and risk policies in place.
  • Implement ESG policies and disclosure templates aligned with investor expectations and FCA guidance.

Jurisdiction and sources

Primary official sources for the matters described include:

General information only; not legal advice and not a substitute for advice on a particular matter.