Industry view: RIF will plug an important gap

The reserved investor fund or RIF will plug an important gap in the UK’s fund offering. This consultation signals that, subject to consultation feedback, UK fund managers could begin to launch RIFs from April 2024. 

I am very grateful that government and FCA officials have constructively engaged with the industry campaign for an unauthorised contractual scheme, including with the RIF name – appropriate to the eligible investor range. Eligible RIF investors are institutional and the high net worth category of retail investor. The RIF in the UK has the opportunity become a recognised global brand to compete with the likes of the Luxembourg RAIF.

A whole spectrum of UK fund managers – from SMEs to larger firms – will be entitled to benefit from the efficiencies of the RIF. Managers will avoid having to go offshore with all the challenges, inefficiencies and costs of dealing with multiple legal, tax and regulatory regimes. For instance, managers could combine the RIF with qualified asset holding companies (another welcomed HM Treasury funds regime review reform) for global real estate strategies. 

The RIF would enhance the UK’s status as an international funds centre. It offers an attractive speed to market launch solution – and is unconstrained in terms of its portfolio, albeit there are understandable non-resident capital gains rules to protect the exchequer. The RIF offers flexibilities, as a closed-ended or hybrid investment fund structure; particularly attractive for being matched with holding long term productive underlying alternative investments. It will also benefit from a light touch regulatory regime, operating with a UK AIFM and UK depositary. There is no need for prior application to, nor approval from, the FCA.