RIF - Reserved Investor Fund
Melville is the key architect and lead advocate of the UK Reserved Investor Fund (RIF) proposal. He is recognised as the progenitor of the RIF:
Melville has been instrumental in designing of the RIF:
- unauthorised co-ownership AIF
- closed-ended or a hybrid
- limited to institutional investors & (£1m min. commitment) high net worth investors
- effectively tax transparent & tradable units i.e. transfers not inhibited by transaction tax
- unlisted & operates within the UK AIFMD regime with a UK AIFM & UK depositary
- plugs a gap in the UK funds regime, particularly for real estate fund managers
RIF key attractions:
- strengthens the UK's fund offering and improves competitiveness
- lowers the barriers for SME asset managers to launch new products
- speed to market and low-cost, in terms of launch and operation
- increases the number of closed-ended or hybrid investment vehicles in the UK
- promotes investment in longer-term, less liquid assets
-
will assist in getting growth going in the UK economy as well as creating jobs and opportunities
- addresses investors' preference for an onshore fund structure that is FCA regulated
- a "quick win" legislative solution
The RIF will facilitate fund management houses support the UK government's goals to level up the nation as well as accelerate the infrastructure and green industrial revolutions.
The 6th March Spring 2024 Budget saw a welcome announcement from the UK government on the RIF. The government confirmed it is proceeding with tax rules to introduce the RIF. It has since begun legislating through the Finance (No.2) Bill 2024 and published draft tax regulations for the RIF. The government's consultation on the draft tax regulations ends on 14th May 2024.
UK government and regulator officials have constructively engaged with this proposal. There is widespread industry support for the RIF initiative, including from institutional investors as well as large and SME fund managers.
RIF Latest Update:
2 April 2024 the government's draft tax regulations for the RIF.
13 March 2024 Finance (No.2) Bill 2024, Clause 20 refers to tax legislation for the RIF.
https://publications.parliament.uk/pa/bills/cbill/58-04/0179/230179.pdf
6 March 2024 the government is proceeding with tax rules to introduce the RIF.
https://www.gov.uk/government/consultations/reserved-investor-fund-consultation
30 November 2023 the Financial Conduct Authority confirmed in its Regulatory Initiatives Grid page 44 that "The Government is progressing work on proposals on the establishment of an unauthorised contractual scheme for professional investors."
29 June 2023 Royal Assent of the Financial Services and Markets Act 2023, with Section 64 establishing RIFs (referred to as unauthorised co-ownership AIFs) in primary legislation:
https://www.legislation.gov.uk/ukpga/2023/29/section/64/enacted
See also paragraphs 475-482 and 1317-1324 inclusive explanatory notes
Melville is very grateful to:
- AIMA, AREF, BPF, The Investment Association, INREV, IPF and other industry organisations;
- fund managers, institutional investors, tax advisers, law firms and other professionals
for supporting the RIF.
He appreciates the kind assistance from research, tax, regulatory specialists, senior counsel (John Virgo) and other contacts in developing the design of the RIF.
Webinar:
21/03/24: Seize the RIF opportunity - Alternative Investment Management Association/ Association of Real Estate Funds/British Property Federation/The Investment Association/European Investors in Non-Listed Real Estate/Investment Property Forum/Real Estate Investors’ Forum
Articles:
5/04/24: IPE Real Assets: Guest view: How should UK real estate managers choose between a RIF and REIT?
22/03/24: IPE Real Assets: Guest view: UK fund managers – seize the RIF opportunity
07/03/24: UK to legislate for reserved investor funds in boost for real estate managers
06/03/24: Property EU: UK to proceed with RIFs much to fund industry delight
19/05/23: IPE Real Assets: Guest view: Let’s get the UK’s Reserved Investor Fund done
05/05/23: Property Week: Government launch of new fund vehicle proposals to boost real estate investment
28/04/23: IPE Real Assets: UK government consults on creation of ‘reserved investor fund’
08/12/22: Property Week:PIF changes to boost property funds sector
https://www.propertyweek.com/news/pif-changes-to-boost-property-funds-sector/5123208.article
02/12/22: IPE Real Assets: UK government prepares to create new onshore closed-ended funds
16/04/22: Apex Group, Professional Investor Funds could fill the UK fund sector gap
https://www.apexgroup.com/insights/key-issues-relating-to-fund-management/
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
https://www.ipsx.com/news/podcasts-onshore-versus-offshore/
2/7/20: AREF & IPF, Webinar: PIF Proposal Explained
https://www.aref.org.uk/events/ems-event-calendar/aref-ipf-webinar-pif-proposal-explained.html
13/05/20: Lexis Nexis, A Gap in the market
4/3/20: FTfm, UK investment body lobbies for property fund revamp
https://www.ft.com/content/f6677d00-919c-45a1-a6c1-0840b3b919ff
May/June 2019: IPE Real Assets, A new UK fund structure
https://realassets.ipe.com/brexit/melville-rodrigues-a-new-uk-fund-structure-please/10030940.article
"Very well done indeed on getting the Government finally to bring in RIFs – a most tenacious effort and hopefully it will be well-appreciated by the real estate capital management industry. We certainly do." March 2024
- Hugo Llewelyn, CEO, Newcore Capital
“Huge credit goes to Melville Rodrigues who has pushed forward this initiative from day one”. March 2024
- John Forbes, Principal, John Forbes Consulting LLP
"Congratulations on seeing the ‘birth’ of the RIF! Clearly wouldn’t have happened absent your spearheading of the initiative. It’s a rarity in our world that people get to see such a ‘complete’ example of an initiative that is proposed, worked up, then endorsed and launched by the Government – you should be very proud of it." March 2024
- Head of Investment Managment Tax, Global Fund Manager
"The more I read about the RIF, the more I wish someone had taken your initiative years ago!" January 2024
- UK Real Estate Fund Manager
“Thank you very much for the opportunity to work with you on this exciting and certain to be market shaping new vehicle!” June 2023
- UK Tax and Funds Specialist, one of the Big Four accounting firms
"Melville, 100 x well done on your remarkable achievement!" May 2023
- Tax Specialist, Magic Circle law firm
“Special thanks to Melville for all his initiative, leadership and hard work in progressing the PIF proposal. We believe the PIF will be an excellent product that would introduce an important new choice for investors and that the real estate investment industry would enthusiastically take it up.” October 2022
- Jeff Rupp INREV Director of Public Affairs
"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
- Funds Specialist, 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." August 2020
- 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
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