Expected this year, fund to unlock billions for levelling up and other essential projects
LONDON
A UK Goan lawyer and real estate funds expert has spearheaded a new type of investment fund which is likely to be available in the UK later this year, to unlock billions in new capital for essential UK projects - from levelling up to net zero.
The Reserved Investor Fund (RIF), a UK fund primarily for pension and other institutional investors, is expected to be available following Royal Assent to the forthcoming Finance Bill 2024.
The RIF legislation is currently moving quickly through the latter stages via the Finance Bill and government consultation on draft tax regulations, which ended on May 14.
The key architect and lead advocate of the RIF initiative is Melville Rodrigues, head of real assets advisory at Apex Group, member of the Association of Real Estate Funds Public Policy Committee and traces his roots to Candolim.
BENEFITS
Melville said the RIF has received widespread support from industry and constructive engagement with HM Treasury, HMRC and the Financial Conduct Authority officials.
“The RIF is based onshore in the UK – unlike offshore property funds – and it has an effective transparent tax status. This means investors are liable for tax on the income of the fund on an arising basis in accordance with their own circumstances,” said Melville.
“It is quick to create and launch and straightforward to operate. It is hoped that such simplicity and flexibility will encourage a larger number of smaller asset managers to launch strategies using the fund structure.”
PURPOSE
As a law firm funds partner, Melville saw the gap in the UK fund offering, sacrificed his law firm career to progress the campaign to plug the gap with the RIF and engaged with the officials.
“It has been wonderful for me to lead the industry initiative, working over several years with government and regulatory officials and the real estate industry. It’s a privilege to have developed a rapport with officials and to have attracted such goodwill, expertise and enthusiasm within industry,” said Melville.
“The draft RIF tax regulations reflect a pragmatic and robust way forward for government, the regulator and industry.”
“With the RIF legislation being implemented, my passion is for the RIF to attract UK and international institutional capital (and in the process ease the burden on government finances) for regeneration of our town centres, more social and affordable housing and accelerating net zero goals. I’m looking forward to UK fund managers later this year launching RIFs.”
INDUSTRY SUPPORT
Paul Richards, CEO at the Association of Real Estate Funds, which represent funds with £50bn in UK property investments alone, said: “We expect the RIF to give our members and their investors, UK and overseas, quick and simple access to projects that can help the UK economy grow, house its people more effectively and make for a more sustainable way of living and working.”
Rachel Kelly, Assistant Director at the British Property Federation said removing barriers to real estate investment and ensuring that the UK has appropriate fund offerings for investors’ needs will be helpful in bolstering the UK's funds industry and important in addressing some of the biggest challenges of our time - including our net zero carbon targets, the regeneration of our high streets, and the development of more high quality homes.”
Sue Forster, Chief Executive at Investment Property Forum stated “The Investment Property Forum, which draws members from a broad cross section of the UK real estate investment industry, is a longstanding supporter of this initiative to address a gap in the fund vehicles available for investment in UK direct property. We hope that this will facilitate investment at a time when unlocking capital for urban regeneration, housing and decarbonisation of our built environment is at a critical point.”
