Concept
Regulatory hosting is a way to conduct regulated activity under someone else's FCA authorisation. In the fund version, a separate FCA firm (host AIFM) is appointed as the fund manager and is responsible for portfolio and risk management, while the sponsor team becomes an appointed representative of that host or its investment adviser by delegation. The legal basis is section 39 FSMA 2000: the principal is liable to the FCA for the actions of the AR.
For a manager, this is a way to launch a fund and start collecting management fees without waiting for their own licence—which takes a year or longer to obtain. The operational side (onboarding, economics, host requirements) is covered in appointed representative and fund hosting; here we look at who provides the service and what to consider when choosing.
🍓 An AR acts under the principal's licence, but the principal bears liability for it. That's why a serious host actually controls the delegated functions, rather than simply "renting out" the authorisation.
How the model works
A host AIFM is typically a full-scope AIFM with MiFID top-up: it holds portfolio and risk management for the fund, while the sponsor conducts investment analysis and recommendations under a delegation agreement as an AR or sub-adviser. The depositary, administrator, and auditor are engaged separately. Launch through a ready-made host takes around 4–6 weeks versus a year or more for your own FCA authorisation.
Providers
Below are notable UK host AIFMs as of mid-2026. The composition of the group and provider ownership change (the market is consolidating), so status should always be verified against the FCA AR register.
- Sturgeon Ventures — one of the oldest regulatory incubator/hosts in the UK market.
- G10 Capital and Sapia Partners — part of the IQ-EQ group; popular with PE and hedge teams.
- ACA Mirabella — a major host for hedge funds and investment managers.
- Brooklands, Privium, Khepri, and Laven — notable independent host providers.
What hosts require during onboarding
The host must conduct investor due diligence (AML and financial crime), assess the strategy and infrastructure, and then regularly review the delegated functions. The FCA explicitly criticises "tick-box" AR onboarding: the host must actually control, not just formally sign off. For its part, the sponsor discloses the team's regulatory history, policies, and provides access to data.
Model risks and FCA position
In a 2023 review, the FCA found systemic weaknesses in host AIFMs: superficial oversight of secondees (an employee works remotely while their primary employer is the AR, creating a conflict of interest), insufficient host participation in due diligence, capital that does not account for the number of funds and ARs on a single licence, and misleading statements when an AR calls itself an investment manager.
After the Greensill collapse, Parliament recommended narrowing the AR regime; the FCA responded with document PS22/11 (December 2022)—enhanced principal oversight and reporting. In 2026, HM Treasury is consulting on a gateway: a separate FCA permission to become a principal and extension of SMCR to AR personnel.
When to transition to your own licence
Hosting costs a fee plus a percentage (often of AUM or revenue), so at scale it ceases to be cheaper than your own authorisation. Signals to transition: growing AUM, multiple strategies, institutional investors who need a directly regulated manager, and the desire to independently control compliance. For the logic of launching a fund through a ready-made structure, see also the materials on funds and on private fund in Singapore.
EU analogue: third-party ManCo
In the EU, the same task is solved by third-party ManCo / AIFM (ManCo-as-a-service) in Luxembourg and Ireland: an external management company takes on regulatory functions, the investment team works by delegation, and distributes the fund by passport. Players include Waystone, IQ-EQ, Universal Investment, Apex/FundRock, Ocorian, Alter Domus, Carne, Gen II. More detail in third-party ManCo (Lux/Ireland); a similar logic of rented fund structure applies to Singapore's VCC.
Applicable regulation
Section 39 FSMA 2000 establishes the principal's liability for the AR (FSMA 2000 s.39). The FCA's dedicated page on AIFM hosting describes the model and regulator expectations (FCA, AIFM hosting). The regime is being tightened by PS22/11 and the HM Treasury 2026 consultation.
Q/A
Is your own FCA licence needed to launch a fund? No—you can do it through a host AIFM in AR status. But liability and control remain with the host, and this is reflected in its requirements.
How does a host AIFM differ from a fund administrator? An administrator handles accounting and NAV; a host AIFM is a regulated manager responsible for portfolio and risk management and for the AR itself.
What does the 2026 gateway change? Becoming a principal "by default" will no longer be possible: a separate FCA permission will be required, and AR personnel will fall under SMCR.
This material is prepared as an expert overview and does not constitute individual legal advice.
FAQ
What does the 2026 gateway change? Becoming a principal "by default" will no longer be possible: a separate FCA permission will be required, and AR personnel will fall under SMCR.
This material is prepared as an expert overview and does not constitute individual legal advice.
Key factual claims
- Below are notable UK host AIFMs as of mid-2026.
- After the Greensill collapse, Parliament recommended narrowing the AR regime; the FCA responded with document PS22/11 (December 2022)—enhanced principal oversight and reporting.
- Section 39 FSMA 2000 establishes the principal's liability for the AR (FSMA 2000 s.39).