Overview
Managing an Unauthorised AIF is a permission that enables a firm to manage alternative investment funds (AIFs) that are not authorised by the FCA, which include structures such as private limited partnership funds, unauthorised unit trusts, Reserved Investor Funds (RIFs), closed-ended investment companies that qualify as AIFs, and non-UK AIFs managed or marketed from the UK. This permission is distinguished from the Managing an Authorised AIF permission variant based on the authorisation type of the fund being managed. Both permissions represent the Managing an AIF regulated activity, which covers the portfolio management and risk management of alternative investment funds (AIFs).[1]
Unlike authorised funds that may be marketed to retail investors depending on the fund type and the scope of FCA authorisation, unauthorised AIFs are typically marketed only to professional, institutional, or otherwise qualified investors under the UK’s financial promotion and non-mainstream pooled investment (NMPI) regimes.[2] The manager is subject to requirements under the UK AIFM regime and FCA rules, including FUND, SYSC, COBS and SUP, covering conduct, depositary arrangements (where required), risk management, governance and regulatory reporting, among other requirements, while the fund itself generally sits outside the FCA’s authorised-fund product rules in COLL.[3]
At the firm level, alternative investment fund managers (AIFMs) either hold authorised status (Full-Scope or Small Authorised) or hold registered status (Small Registered).[4] These permissions only apply to authorised AIFMs because registered AIFMs operate outside the Part 4A permission regime and are instead supervised under a separate registration regime.[5]
As at Q4 2025, there are 1,284 UK AIFMs in total. 1,151 of them are authorised, while the remaining 133 are registered. Of the 1,151 authorised firms, 28 hold only the Managing an Authorised AIF permission (2.4%), 1,051 hold only the Managing an Unauthorised AIF permission (91.3%), and 72 hold both (6.3%).
| Permission Combination |
AIFM Count |
| Managing an Authorised AIF (only) |
28 |
| Managing an Unauthorised AIF (only) |
1,051 |
| Managing both Authorised and Unauthorised AIFs |
72 |
| Total authorised AIFMs |
1,151 |
Limited Partnership AIFs (LP / PFLP)
Limited partnership AIFs are typically closed-ended private funds established as English or Scottish limited partnerships under the Limited Partnerships Act 1907 and, where they meet the “private fund conditions” (constituted by written agreement and qualifying as a collective investment scheme), may be designated as private fund limited partnerships (PFLPs) under the Legislative Reform (Private Fund Limited Partnerships) Order 2017.[6]
These vehicles are used primarily for private equity, venture capital and other illiquid alternative strategies in which investors commit capital to be drawn down and invested over a long-term fund life, with investors holding partnership interests that are generally treated as interests in an unregulated collective investment scheme and a non-mass market/non-mainstream pooled investment, so that FCA rules on the promotion of UCIS and non-mass market investments effectively restrict marketing to professional clients and to certain categories of certified high-net-worth or sophisticated investors using the relevant financial promotion exemptions.[7]
Unauthorised Unit Trusts (UUTs)
Unauthorised unit trusts (UUTs) are unit trust schemes that are not authorised or recognised under the FCA’s authorised-fund regime and instead fall within HMRC’s unauthorised unit trust regime, under which they are categorised for tax purposes as exempt unauthorised unit trusts (EUUTs), non-exempt unauthorised unit trusts (NEUUTs) or, in specified transitional cases, mixed unauthorised unit trusts (MUUTs). [8]
EUUT status is available where the trustees are UK-resident, all unitholders are “eligible investors” (including certain pension schemes, authorised funds and charities) and HMRC approval is obtained, and UUTs (including EUUTs and pension fund pooling schemes) are commonly used for institutional and pension pooling mandates such as UK real estate portfolios, with investment, borrowing and dealing terms set by the trust deed rather than COLL and units typically constituting interests in an unregulated collective investment scheme and non-mass-market investment, so that promotion is generally restricted to institutional and other professional investors and, where permitted, qualifying high-net-worth or sophisticated investors under the UCIS and non-mass-market-investment financial promotion regimes.[9]
Reserved Investor Fund (RIF)
The Reserved Investor Fund (RIF) is a UK-based unauthorised contractual co-ownership schemes established under a statutory regime that includes the Co-ownership Contractual Schemes (Tax) Regulations 2025 and the Unauthorised Co-ownership Alternative Investment Funds (Reserved Investor Fund) Regulations 2025, which together implement the new RIF vehicle as an unauthorised co-ownership alternative investment fund with modified investor rights akin to those in authorised contractual schemes.[10]
HM Treasury and HMRC describe the RIF as a new fund structure designed to complement and enhance the UK’s existing funds regime by providing a UK-based unauthorised contractual scheme with lower costs and greater flexibility than authorised contractual schemes, open only to professional and institutional (including “large”) investors and expected to be particularly attractive for investment in UK commercial real estate and other illiquid assets, with detailed investment, leverage and liquidity terms set in the scheme documentation rather than by COLL.[11]
Other Unauthorised AIF Structures
Other AIF structures commonly seen in practice include corporate AIFs (such as investment trusts and REITs) and non-UK funds that meet the Article 4(1)(a) AIFMD definition but are not UK-authorised schemes [12,13].
Joint-venture and co-investment vehicles can also form part of the unauthorised AIF population where they are structured as collective investment undertakings under AIFMD and ESMA’s key concepts guidance, while joint ventures established as operational businesses with a general commercial or industrial purpose are usually regarded as outside the AIF perimeter [14,15].
See Also
Dataset of UK AIFMs