06 Mar 2024

The Reserved Investor Fund (RIF) is designed to complement and enhance the UK’s existing funds regime by meeting industry demand for a UK-based unauthorised contractual scheme with lower costs and more flexibility than the existing authorised contractual scheme. The RIF will be open to professional and institutional investors. It is expected to be particularly attractive for investment in commercial real estate.

Legislating for the Reserved Investor Fund

In the Spring Budget 2024, the UK Government published its response to its consultation (see below) on the introduction of an unauthorised co-ownership contractual scheme, the Reserved Investor Fund (RIF). The Government is confident the RIF will be a fund vehicle which serves as a valuable addition to the UK’s fund range.

The Government will begin legislating for the RIF in the Spring 2024 Finance Bill. The detailed tax rules will be provided for by secondary legislation. The Government have published an Introduction of tax rules for the Reserved Investor Fund.

The Government intends to engage further with stakeholders, in due course, on the policy design for the RIF. This is to ensure that RIFs benefit from the simplicity and certainty which respondents to the consultation requested. If you did not respond to the consultation and would like to be included in this engagement, please contact UKFundsReview@hmtreasury.gov.uk

Reserved Investor Fund Consultation

On 27 April 2023, the Government published a consultation on the proposed introduction of the Reserved Investor Fund (Contractual Scheme), or RIF.  (Formerly known as the Professional Investor Fund or PIF)

The consultation sought views on the following areas –

  • Whether the government should introduce the RIF, and if so whether it should introduce the unrestricted RIF or a restricted RIF. In particular, the consultation invites views on:
    • Restrictions to the investment strategy and/or eligible investors. Particularly whether the aims for a new unauthorised contractual scheme can be achieved if the RIF was restricted, either in relation to the assets the fund can invest in, or the type of investors permitted to invest in the fund.
  • The eligibility and notification criteria.
  • The branding of the RIF. The consultation seeks views on the proposed fund name: ‘Reserved Investor Fund (Contractual Scheme)’, or RIF(CS). 
  • The proposed design of a new tax regime for a RIF. It is intended that the tax regime should largely replicate the tax rules for Co-ownership Authorised Contractual Schemes (CoACS).
  • The application of the non-resident capital gains rules to a RIF. The government is seeking views on options to overcome challenges identified with the non-resident capital gains tax rules.
  • The treatment of unauthorised co-ownership contractual schemes that would not fall within the RIF regime.

The consultation was open until 9 June 2023. With the assistance of the RIF Expert Working Group, AREF drew up a response. This was overseen by AREF's Tax Committee and Public Policy Committee

Financial Services and Markets Bill

On 1 December 2022, the Government tabled amendments to the Financial Services and Markets Bill relating to unauthorised co-ownership AIFs i.e. the Reserved Investor Fund (RIF). The amendments facilitated HM Treasury implementing legislative solutions so:

  • RIF investors will enjoy limited liability; and
  • The RIF can operate as an umbrella fund.

The Financial Services and Markets Bill received Royal Assent on 29 June 2023.


AREF’s proposal for the Professional Investor Fund (PIF)  was included in the IA’s UK Funds Regime Report to HM Treasury Asset Management Taskforce in March 2020.

Please Note the following changes to page 7, paragraph 2 of AREF's Proposal for the PIF (amended 26/06/2020).  These changes were made to further clarify the proposed PIF is specifically intended for professional investors only. Retail investors shall be prohibited.

New wording: "is limited to a similar category of investors who are permitted to invest in a Qualified Investor Scheme ACS.  Direct investment in a PIF is limited to investors who invest a minimum of £1 million and are professional investors. Other investors can only access a PIF through feeder funds which satisfy the professional investor status."

Previous wording: "is limited to the same category of investors who are permitted to invest in an ACS.  Direct investment in a PIF is limited to investors who either invest a minimum of £1 million or are professional institutional investors.  Other investors can only access a PIF through feeder funds which satisfy the professional institutional investor status."

Melville Rodrigues, a member of AREF's Public Policy Committee, is leading on the dialogue between the Government, regulators and the industry, along with a RIF Expert Group, to address legislative and regulatory provisions so UK fund managers can operate RIFs, which will plug a gap in the UK fund offering. It is hoped that the RIF will enable managers, focused on real estate and other sectors, to progress with new fund launches, and avoid having to go offshore and experience the challenges of – and incurring costs associated with – multiple legal, tax and regulatory regimes


BCLP Article: Will the introduction of the PIF bring alternative fund formations back onshore in the UK? (Jan 23)
Property Week Article: PIF changes to boost property funds sector (Dec 22)

IPE article: UK government prepares to create new onshore closed-ended funds (Dec 22)

Read The Investment Association's UK Funds Regime Report to HM Treasury Asset Management Workforce

Read AREF's Proposal for the Professional Investor Fund (PIF)

IPE Real Assets article: UK government consults on creation of ‘reserved investor fund’ (Apr 23)

Property Week Article: Government launch of new fund vehicle proposals to boost real estate investment (May 23)

IPE Real Assets Article: Guest view: Let’s get the UK’s Reserved Investor Fund done (May 23)

Download AREF's Response (9 June 2023) by clicking here.




Jacqui Bungay

Jacqui Bungay

Head of Policy and Company Secretary, AREF

Jacqui is AREF’s Company Secretary and provides policy guidance and secretariat services to AREF’s Board and Management Committee as well as many of AREF's committees and working groups.

Jacqui joined AREF in 2014 after working for over 25 years in fund compliance, client relationships and administration in the trustee and depositary sector.