Overview
Managing an AIF is a regulated activity that covers the portfolio and risk management of alternative investment funds (AIFs). In practice, this activity is represented as two FCA permission variants based on the fund's authorisation status: Managing an Authorised AIF and Managing an Unauthorised AIF.[1]
At the firm level, alternative investment fund manager (AIFM) either hold authorised status (Full-Scope or Small Authorised) or hold registered status (Small Registered).[2] 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.[3]
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 |
Definition
Managing an AIF is a regulated activity specified in article 51ZC of RAO 2001, based on the following points:[4]
1. Core Functions
A person that performs at least one of the following activities for an alternative investment fund is classified as managing an AIF:
• Risk Management
• Portfolio Management
2. Extended Functions
The following activities are included within the Managing an AIF activity if the person manages an AIF and the activities are carried out for that AIF or in connection with the management of that AIF.
• 1) Administration: (i) legal and fund management accounting services; (ii) customer inquiries; (iii) valuation and pricing, including tax returns; (iv) regulatory compliance monitoring; (v) maintenance of unit-/shareholder register; (vi) distribution of income; (vii) unit/shares issues and redemptions; (viii) contract settlements, including certificate dispatch; (ix) record keeping.
• 2) Marketing: The marketing and promotion of the alternative investment fund.
• 3) Activities related to the assets of AIFs: Namely services necessary to meet the fiduciary duties of the AIFM, facilities management, real estate administration activities, advice to undertakings on capital structure, industrial strategy and related matters, advice and services relating to mergers and the purchase of undertakings and other services connected to the management of the AIF and the companies and other assets in which it has invested.
3. Delegation
A firm is not treated as managing an AIF if the functions it performs for the AIF have been delegated to it by another person (e.g. risk or portfolio management), provided that the delegating AIFM has not delegated those functions to such an extent that it becomes a ‘letter-box’ entity.
FCA Permissions
The Managing an AIF regulated activity is represented in practice as two FCA permission variants based on the authorisation status of the fund being managed:
1.
Managing an Authorised AIF
The Managing an Authorised AIF permission enables a firm to manage alternative investment funds (AIFs) that are authorised by the FCA, which include Non-UCITS Retail Schemes (NURS), Long-Term Asset Funds (LTAFs) and Qualified Investor Schemes (QIS). [5,6] Unlike unauthorised funds that are typically marketed only to professional, institutional, or otherwise qualified investors, authorised funds may be marketed to retail investors depending on the fund type and the scope of FCA authorisation. [7,8]
Both the manager and the fund are subject to requirements under the UK AIFM regime and FCA rules, including the Collective Investment Schemes sourcebook (COLL), covering conduct, depositary arrangements, risk management, governance and regulatory reporting, among other requirements. [9,10]
2.
Managing an Unauthorised AIF
The Managing an Unauthorised AIF permission enables an AIFM to manage alternative investment funds that are not authorised by the FCA (e.g., private equity funds, hedge funds, and other alternative funds). These funds are typically marketed only to professional, institutional, or otherwise qualified investors under exemptions from retail marketing restrictions. [11]
The AIFM remains subject to the UK AIFM regime, while the fund itself is outside the scope of COLL. Fund-level requirements therefore differ from those that apply to authorised funds. [12]
See Also
Dataset of UK AIFMs