UK PIF - Professional Investor Fund

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 within the UK AIFMD regime: a full scope AIFM & depositary
  • plugs a gap in the UK funds regime, particularly for real estate fund managers  


PIF key attractions:

  • strengthen the UK's fund offering
  • lower the barriers for SME asset managers to launch new products
  • increase the number of closed-ended or hybrid investment vehicles domiciled in the UK
  • promote investment in longer-term, less liquid assets
  • will enable fund management houses to drive the UK government's goals to level up the nation as well as accelerate the infrastructure and green industrial revolutions
  • addresses professional investors' preference for an onshore fund structure that is regulated by the FCA
  • 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 large and SME fund managers. 


PIF News:

On 10 February 2022 HM Treasury published its responses to feedback from respondents to its 26 January 2021 Call for Input/CFI. In these responses, the Government confirms that it and the FCA propose to take forward "further work to explore options for the introduction of a new unauthorised contractual scheme fund structure". This confirmation is very welcome.

The FCA stated in their Policy Statement 21/12 issued on 25 October 2021 “It is important for funds authorised by the FCA to give unitholders or shareholders the right to redeem their units or shares. If a fund intends to make investments that are only suited to a closed-ended vehicle, we would not expect the manager to seek authorisation as an open-ended fund.” “Authorised ” funds are required by regulation to be open-ended. Fund managers will have the opportunity to utilise the PIF for holding real estate and other illiquid investments that fall within the category of “investments that are only suited to a closed-ended vehicle”.


In the CFI, HM Treasury requested responses to questions, including question 30 to 37 (inclusive) focused on the PIF. The CFI closed on 20 April 2021.  


Melville is very grateful to:

- AREF, INREV, IPF and other industry organisations;

- 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.


Download Suggested Responses to the CFI


Melville looks forward to engaging with Government and the FCA in progressing the further work to explore options for the introduction of the PIF.  As indicated,the PIF  can be delivered swiftly  via a "quick-win" secondary legislative solution.

Media coverage on the PIF:


4/3/22: AREF/INREV/IPF webinar UK Treasury's Response: Funds Regime Review Call for Input - 4th March 2022


16/04/22: Apex Group, Professional Investor Funds could fill the UK fund sector gap

18/03/21: Property Week, Professional Investor Funds (PIFs) could fill the UK fund sector gap

24/2/21: IPE Real Assets, UK funds review: chance to create real estate fund that meets institutional needs

3/2/21: Property Week, Government call for input on property fund structure change

16/12/20: Property Week, Government launches second consultation on REIT tax structure

3/8/20: IPSX,  Podcast: Onshore versus offshore

2/7/20: AREF & IPF, Webinar: PIF Proposal Explained

23/6/20: AREF,  New fund vehicle proposed

13/05/20: Lexis Nexis,  A Gap in the market

4/3/20: FTfm, UK investment body lobbies for property fund revamp

May/June 2019: IPE Real Assets, A new UK fund structure

"What you have done in terms of spearheading this new fund structure and pushing it through as well as ironing out all the structural difficulties so that it is as attractive as possible for the asset management market is nothing short of ground-breaking." June 2022

- Magic Circle law firm

"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 

- Jane Fear, Director, Property Funds Research