Professional Investor Fund (PIF) explained

Professional Investor Fund (PIF) explained

Financial Services analysis: Melville Rodrigues, senior consultant—Fund Services, Ocorian, who is leading this initiative for a new fund proposal for the UK funds industry, provides an overview of the proposal and outlines his hopes for the next steps of the initiative.

 

Original News

AREF sets out proposals for a new fund vehicle

In its Spring 2020 Budget, the government stated that it will ‘undertake a review of the UK’s funds regime during 2020. This will cover direct and indirect tax, as well as relevant areas of regulation, with a view to considering the case for policy changes’.

Those involved in lobbying for the Professional Investor Fund (PIF) welcome this statement. We feel there is a gap in the UK’s fund offering for professional investors in comparison to that offered by international competitors. In particular, fund management houses looking for a closed-ended or hybrid fund to hold UK real estate investments (which have the attributes of being unlisted, tax transparent and offering tradeable units) are currently forced offshore. Their onshore fund choice (with these attributes) is restricted to an open-ended authorised fund. An open-ended fund must comply with operational requirements that erode returns and may be inappropriate for holding illiquid assets.

Representatives of HM Treasury and the Financial Conduct Authority (FCA) have constructively engaged with the PIF initiative. Details of the PIF proposal are contained in the Submission Document of the Association of Real Estate Funds (AREF), and the proposal is supported by the Investment Association (IA). The IA has incorporated the PIF within the framework set out by the UK 

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About the author:
Prior to joining LexisNexis in 2016 as a paralegal, Lauren was an adjudicator at the Financial Ombudsman Service. There she resolved consumers’ complaints, and gained knowledge about a wide variety of financial products. Before this she studied Law at Nottingham Trent University.