# Appointed Representative and Regulatory Hosting: Fund Without Own FCA Licence > How to launch a fund and raise capital in the UK without your own FCA licence: appointed representative under FSMA s.39, host AIFM, third-party ManCo in the EU, risks and AR reform after Greensill. Author: Гордей Болотько — партнёр, Corporate & Commercial (https://wiki.private.law/authors/bolotko) Last modified: 2026-07-21T10:09:00.000Z Canonical: https://wiki.private.law/en/uk-regulatory-hosting Topics: structures Jurisdictions: uk Semantic tags: fund-vehicle, license --- ## Concept > 🔗 **Related** > [embedded finance](https://wiki.private.law/en/embedded-finance) · [VCFM](https://wiki.private.law/en/vcfm) · [license-for-rent](https://wiki.private.law/en/license-for-rent) In the United Kingdom, a regulated business—for example, fund management—can be launched under someone else's FCA licence. An appointed representative (AR) conducts regulated activities under the licence of a principal (FSMA 2000, s.39). In funds, the role of principal is played by a host AIFM—a separate FCA firm that officially becomes the manager (AIFM) of your fund, while the sponsor works as an investment adviser under delegation. This is the fund vertical of embedded finance. A host AIFM typically has full-scope AIFM status with MiFID top-up. Portfolio management and risk management formally remain with the host; the sponsor, as an AR, conducts investment ideas, deal due diligence, and investor relations under a delegation agreement. For UK venture managers, a related regime is VCFM. > 🍓 The principal is responsible to the FCA for the actions of the AR. Therefore, the host must substantively control the sponsor; the FCA directly criticised formal tick-box onboarding in its 2023 review of host models. ## How It Works The distribution of roles is set by the delegation agreement. The host holds the licence, regulatory reporting, capital, and compliance functions; the sponsor-AR conducts the investment side within the mandate. Legally, the host manages the fund; the sponsor drives the economics and deal decisions—within the limits of what the host has agreed and controls. ## What You Need to Launch You don't need your own FCA licence. You need a host AIFM (full-scope + MiFID top-up) and registration of the sponsor as an AR or sub-manager under delegation. Onboarding—guideline 4–6 weeks: sub-threshold SCSp 2–4 weeks, RAIF 4–6, depending on documents and service provider onboarding. The fund can charge a management fee from the very start. What the host requires: investor due diligence (AML and financial crime), a delegation agreement with clearly described functions, regular reviews of delegated activities, sometimes secondment of sponsor personnel under host supervision. Substantive control means the host has access to the sponsor's deals and investment decisions, veto rights, and periodic audit—it is precisely the depth of such supervision that the FCA checks first. ## Compliance Host perimeter: SMCR on key individuals, AML, conflicts of interest management, capital adequacy, regular reviews of each AR. The FCA's 2023 review identified typical failures: weak supervision of secondees (working remotely, primary employer is the sponsor, hence conflict of interest), insufficient host participation in due diligence, capital not accounting for the number of funds and ARs, misleading statements (AR calling itself an investment manager). Supervision of ARs must be ongoing. ## How It's Done in the Market > 🔗 **Related** > [third-party ManCo in the EU](https://wiki.private.law/en/third-party-manco-eu) · [funds](https://wiki.private.law/en/funds) Hosting economics: setup fee, fixed annual fee and percentage of AUM or share of management fee. What to look for: capacity and reputation of the host (its problems with the FCA hit all ARs on the platform), real depth of supervision, conflicts, and exit terms. ### Host AIFM providers Notable UK host AIFMs as of mid-2026. Group composition and provider ownership change as the market consolidates, so status should always be verified against the FCA AR register. - **Sturgeon Ventures** — one of the oldest regulatory incubator/hosts in the UK: operating since 1998, an SEC RIA since 2013. - **G10 Capital** (full-scope AIFM with MiFID top-up) and **Sapia Partners** (small-scope) — platforms of the IQ-EQ group, acquired through the purchase of Lawson Conner; popular with PE and hedge teams. - **ACA Mirabella** — one of the largest hosts for hedge funds and investment managers: over 150 client relationships and more than £30bn on the regulatory platform. - **Brooklands** (full-scope AIFM with MiFID top-up, in the market since 2016), **Privium**, **Khepri**, and **Laven** — notable independent host providers. The continental analogue is third-party ManCo/AIFM in Luxembourg and Ireland (Waystone, IQ-EQ, Universal Investment, Apex/FundRock, Ocorian, Alter Domus, Carne, Gen II) for cross-border distribution via EU passport; more details—[third-party ManCo in the EU](https://wiki.private.law/en/third-party-manco-eu). The general logic of choosing and comparing structures is in the material on funds. When AUM and management fee cover the cost of your own AIFM licence, firms transition to their own. ## When the Model Is Justified Hosting is most often used by first-fund managers: teams spinning out of larger funds who need to build a track record before obtaining their own licence, and foreign managers entering the British market without a months-long authorisation. This also includes [fund incubators and accelerators](https://wiki.private.law/en/offshore-fund-incubators), where a host platform allows a first compartment to be raised quickly. The main motives are time-to-launch and ready-made regulatory infrastructure; saving on the size of the fee comes last here. For investors, the host adds an independent layer of supervision and [AML onboarding](https://wiki.private.law/en/investor-onboarding), which simplifies their own due diligence. As the fund gains momentum, the team transitions to its own AIFM licence. > 💡 Hosting speeds up launch and provides ready-made infrastructure. The sponsor keeps investment decisions and reputation to itself, while the host's real supervision noticeably limits its freedom of action. ## Applicable Regulation > 🔗 **Related** > [regulatory perimeter trends](https://wiki.private.law/en/regulatory-perimeter-trends) The foundation is [FSMA 2000, s.39](https://www.legislation.gov.uk/ukpga/2000/8/section/39) (AR regime) and [FCA AIFM hosting](https://www.fca.org.uk/firms/principals-appointed-representatives/alternative-investment-fund-manager-hosting). After the Greensill collapse, Parliament recommended narrowing the AR regime; in August 2022 the FCA issued PS22/11 (in force from 8 December 2022)—enhanced principal supervision and new reporting requirements. The reform then moved to the level of legislation: in August 2025 HMT published a policy statement, and in February 2026 a [consultation](https://www.gov.uk/government/consultations/consultation-the-appointed-representatives-regime/consultation-the-appointed-representatives-regime) (closed 9 April 2026) proposing a [gateway](https://www.fca.org.uk/firms/appointed-representatives-principals)—a separate FCA permission to be a principal, the extension of SMCR to AR personnel, and the extension of FOS jurisdiction to complaints against the ARs themselves. The scale of the reform is significant: around 34,000 ARs currently operate under approximately 2,400 principal firms. The government is preparing an implementation plan and timeline. Where the perimeter is moving overall—in the material on [regulatory perimeter trends](https://wiki.private.law/en/regulatory-perimeter-trends). | **Pros** | **Cons** | | --- | --- | | Launch a fund in 4–6 weeks, without your own AIFM licence | The principal is responsible to the FCA for the AR; host controls tightly | | Management fee can be charged from the very start | Share of economics goes to the host (fee + percentage of AUM) | | Ready-made regulatory and compliance infrastructure | Dependence on the capacity and reputation of the host | | Clear path to your own licence as AUM grows | Regime tightening: PS22/11, HMT gateway consultation (closed Apr 2026), SMCR and FOS on AR personnel | ## Where the AIFM Regime Is Heading In parallel with the AR reform, Britain is also reshaping the AIFM regime itself. The full-scope thresholds set in 2013 and not indexed since created a cliff edge: growth in AUM or a revaluation of assets could suddenly drag a small manager under the full scope of requirements. In April 2025, HM Treasury and the FCA put forward for discussion a three-tier regime in which the threshold is determined by net asset value instead of the former leveraged AUM; the FCA's draft rules are expected in 2026. For the host model, this refines the calculation: the threshold for transitioning to your own authorisation becomes smoother. > ⚙️ Two reforms—the gateway for principals and the three-tier AIFM regime—raise both the cost and the accountability bar of the host model. A ready-made host still provides a fast start within weeks; as AUM and the number of strategies grow, the equation increasingly tilts toward your own licence. ## Context and Evolution The model grew out of the logic of FSMA: the AR regime existed for agents and distributors, and after AIFMD (2013) the bar for a manager's own authorisation rose, and host platforms became a convenient entry into the industry—essentially [licence rental](https://wiki.private.law/en/license-for-rent) in a fund wrapper. The turning point came after the collapse of Greensill Capital in 2021: the company operated through AR status, and weak principal supervision exposed the risks of the entire construct. The regulator then tightened the screws: after PS22/11 comes the [2026 HMT consultation](https://www.gov.uk/government/consultations/consultation-the-appointed-representatives-regime/consultation-the-appointed-representatives-regime) on the gateway, SMCR for AR personnel, and the extension of FOS. The practical upshot for the market is that hosting is professionalising: the capacity and real depth of host supervision become the main selection criterion, cheap "paper" principals are leaving, and the path from AR to your own licence remains the natural endgame for growing teams. > 🍓 The key point about the model: a host licence buys the fund speed and ready-made infrastructure; the price is the host's share of the economics and the principal's tight supervision, which the regulator intends to strengthen in 2026. ## Frequently asked questions ### **Do you need your own FCA licence to launch a fund** No. The host AIFM becomes the fund manager under its own licence, and the sponsor works as an AR or investment adviser under delegation. Your own AIFM licence is obtained later, as AUM grows. ### **How long does onboarding take** Guideline 4–6 weeks: sub-threshold SCSp—2–4 weeks, RAIF—4–6. Depends on documents and service provider onboarding. The fund can charge a management fee from the very start. ### **What did the FCA find unsatisfactory in host models** 2023 review: weak supervision of secondees (remote, conflict of interest with primary employer), insufficient host participation in due diligence, capital not accounting for the number of funds and ARs, misleading statements about the AR's role. ### **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 the fund's portfolio and risk management and for the AR itself before the FCA. ### **What does the gateway from the HMT consultation change** Being a principal will no longer be "by default": a separate FCA permission will be required, and AR personnel will fall under SMCR. Final FCA rules are expected after the consultation closed on 9 April 2026. *This material is prepared as an expert overview and does not constitute individual legal advice.* --- ## Sources - [FSMA 2000, s.39](https://www.legislation.gov.uk/ukpga/2000/8/section/39) - [GOV.UK — consultation](https://www.gov.uk/government/consultations/consultation-the-appointed-representatives-regime/consultation-the-appointed-representatives-regime) - [FCA AIFM hosting](https://www.fca.org.uk/firms/principals-appointed-representatives/alternative-investment-fund-manager-hosting) - [FCA — gateway](https://www.fca.org.uk/firms/appointed-representatives-principals) --- ## FAQ ### Do you need your own FCA licence to launch a fund No. The host AIFM becomes the fund manager under its own licence, and the sponsor works as an AR or investment adviser under delegation. Your own AIFM licence is obtained later, as AUM grows. ### How long does onboarding take Guideline 4–6 weeks: sub-threshold SCSp—2–4 weeks, RAIF—4–6. Depends on documents and service provider onboarding. The fund can charge a management fee from the very start. ### What did the FCA find unsatisfactory in host models 2023 review: weak supervision of secondees (remote, conflict of interest with primary employer), insufficient host participation in due diligence, capital not accounting for the number of funds and ARs, misleading statements about the AR's role. ### 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 the fund's portfolio and risk management and for the AR itself before the FCA. ### What does the gateway from the HMT consultation change Being a principal will no longer be "by default": a separate FCA permission will be required, and AR personnel will fall under SMCR. Final FCA rules are expected after the consultation closed on 9 April 2026. --- ## Factual claims - Notable UK host AIFMs as of mid-2026. - The foundation is FSMA 2000, s.39 (AR regime) and FCA AIFM hosting. - The regulator then tightened the screws: after PS22/11 comes the 2026 HMT consultation on the gateway, SMCR for AR personnel, and the extension of FOS.