SEVERAL MANAGERS EXPECTED TO LAUNCH RESERVED INVESTOR FUNDS FROM APRIL 2025
London, 24 February 2025: The UK Government has laid in Parliament the Reserved Investor Fund secondary legislation – meaning fund managers will be able to launch this new onshore fund structure from April 2025.
The Reserved Investor Fund, or RIF for short, is a new structure (devised by lawyer Melville Rodrigues) that enables a wide range of investors – like UK and other pension schemes – to invest simply and cheaply in illiquid assets – such as UK real estate.
Several fund managers are expected to take advantage and convert existing funds into RIFs – or launch new launch RIFs outright. One of the latter is Newcore Capital, which has been successful investing in UK social infrastructure for a decade.
Secondary legislation confirms details such tax treatment and 6th April 2025 as date on which that legislation will come into force.
The RIF brings three main advantages:
- Tax efficient. The onshore RIF is transparent for income-tax purposes, should be able to operate as opaque for chargeable gains purposes and purchases of RIF units are exempt from stamp taxes. Moreover. it means real estate fund managers will no longer be forced offshore.
- Flexibility: The structure is designed with levelling up, commercial property, housing, social infrastructure and other essential assets in mind – and it is flexible (including with quarterly redemptions) enough to enable a wide range of institutional investors to allocate to it.
- Cost-effective: RIFs offer a speedy, flexible and TER (total expense ratio) competitive compared with existing structures – not least because they have a lighter regulatory regime.
Melville Rodrigues, head of real assets advisory at Apex Group and a member of the AREF Public Policy Committee: “The RIF will be a conduit to attract capital and facilitate growth – the number one mission of the UK government. This new fund can act as a valuable new economic catalyst by creating jobs, accelerating the development of our nation’s infrastructure, facilitating the regeneration of our town centres and furthering sustainability strategies. I am very grateful for the officials’ constructive engagement with, and widespread industry support for, the RIF proposal. It is exciting to see several fund managers, large and small, warming up for the launch..”
Paul Richards, CEO at the Association of Real Estate Funds: “Fund managers and their underlying clients tell us they want more options to invest in UK property – from hotels to housing – and they’d like to do it without having to go offshore. The RIF gives them that option, and we’re not surprised to see many of our fund manager members planning RIFs in future, or eyeing the opportunity closely. This is a big moment for the UK funds industry.”
Anne Breen, Global Head of Real Estate, abrdn, and Chair of the Association of Real Estate Funds: “As a nation we have acute social and economic challenges – and what they have in common is a need for meaningful investment. Today’s news will unlock some of that investment, making it easier for organisations like defined contribution pensions to direct their savers’ money into deserving and financially viable opportunities, bringing benefits to all parties.”
Rachel Kelly, Assistant Director at the British Property Federation: “
TBC, Chief Executive at Investment Property Forum: “
Jeff Rupp, Director of Public Affairs at INREV: “
Anne Copeland, Head of institutional Capital, at Newcore Capital: “
Dan Gallon, Assistant Director, Head of Taxation at Association of British Insurers: “
Andrew Smith, Hearthstone Investments: “
Emma Cullen, Feira Real Estate: “
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For further information, please contact:
Paul Richards, AREF: [email protected]
Melville Rodrigues: +44 789 991 0641 or [email protected]
David Butcher, Communications and Content: 07834 350101 or [email protected]
About the Association of Real Estate Funds
The Association of Real Estate Funds (AREF) is the body that represents the interests of its member funds, those firms that advise and support them, and the end customers that invest in our member funds. Our membership includes over fifty funds spanning the leading real estate fund management houses in the industry, through to smaller, specialist boutiques, with a collective net asset value of over £50bn. In addition, we have more than fifty affiliate members and several associate members. We are recognised by policy makers, regulators, tax authorities and other official organisations as the leading spokesperson for real estate funds, so through bringing all stakeholders together we can influence the way our industry evolves. https://www.aref.org.uk
About Melville Rodrigues Consulting:
Melville is recognised for his leadership role in the unlisted UK and European real estate funds industry. He is a technical expert in the establishment and operation of funds as well as associated regulatory and governance issues. Melville is highly visible in the real estate funds market, including conference presentations, webinars and judging panels. Melville is the key architect and lead advocate of the Reserved Investor Fund (RIF) initiative. He is an enthusiastic supporter of industry thought-leadership as well as sustainability initiatives. He combines his consultancy services with honorary roles for several non-for-profit and other organisations.