Melville is the key architect and lead advocate of the UK Professional Investor Fund (PIF) proposal:
Melville has been instrumental in designing of the PIF:
unauthorised contractual scheme
closed-ended or a hybrid
limited to institutional investors, with minimum £1m commitment
effectively tax transparent & tradable units i.e. transfers not inhibited by transaction tax
unlisted & operates with UK AIFMD regime: a full scope AIFM & depositary
PIF key attractions:
one of the solutions for UK's Investment Big Bang by facilitating more investment in long-term UK assets
will enable fund management houses to drive the UK government's goals to Build Back Better as well as goals focused on levelling up the nation, post Covid recovery, infrastructure and green industrial revolutions
will enhance the UK's brand for fund and asset management
a "quick win" secondary legislative solution
UK government and regulator representatives have constructively engaged with this proposal. There is widespread industry support for the PIF initiative, including from institutional investors as well as big business and SME fund and asset managers.
PIF Current News:
On 26 January 2021, UK HM Treasury issued a Call for Input/CFI in which the Government is consulting on the PIF contractual scheme/CFI and other unauthorised fund structures. HMT requests responses to questions the Call for Input/CFI, including question 30 to 37 (inclusive) focused on the PIF. The CFI closed on 20 April 2021.
This October 2021 Report 'Is there an investment case for social and affordable housing in the UK?' sponsored by Homes England, Impact Investing Institute & Investment Property Forum recognises that the PIF proposal “may provide a more tailored fund structure to suit investor requirements and the risk characteristics of [the UK social and affordable housing] sector.” (pages 64 & 65):
- AREF, INREV, IPF and other industry organsiations;
- fund managers, institutional investors, tax advisers, law firms and other professionals
responding to the CFI, and supporting the PIF.
Many respondents kindly utilised suggested precedent responses: responses developed by Melville in light of kind collaboration with research, tax, regulatory specialists, senior counsel (John Virgo) and other network contacts.
Let's hope that HM Treasury, taking into account the CFI responses, will progress with legislative implementation of the PIF. As indicated,the PIF can be delivered swiftly via a "quick-win" secondary legislative solution.
Media coverage on the PIF:
23/03/21: AREF/INREV/IPF webinar UK Treasury's Funds Review: Call for Input consultation - Implications for the Real Estate Funds Sector (recording above)
"The time has come to modernize, standardise and regulate a form of tax-transparent closed-ended or hybrid fund. The PIF submission is welcome and timely."
- Andrew Baum, Professor of Practice, Said Business School, University of Oxford
"There appears to be a clear and genuine need/preference for them to invest via an onshore tax-transparent vehicle. PFR estimate that only 25% of €260bn in AuM in closed-end funds launched by UK based fund managers and targeting UK and European assets in the last 10 years have utilised a UK onshore fund structure. There is a clear opportunity for the UK fund management industry" September 2020