PRESS RELEASE
London, 9 June 2025: Trade associations representing UK real estate – including the Association of Real Estate Funds (AREF) and European Association for Investors in Non-Listed Real Estate Vehicles (INREV) – have presented thought-through, consistent and coherent responses to Treasury and Financial Conduct Authority consultations welcoming proposed reforms. In particular:
· A simpler and appropriate regime for UK AIFMs;
· Unlimited liability for external fund valuers be removed; and
· The importance that the reformed rules do not create regulatory cliff-edges nor arbitrage opportunities, for example between listed and unlisted funds.
The consultations come as the UK seeks to update EU-inherited rules and regulations that apply to UK real estate and other alternative investment fund managers. The consultations each closed on 9 June 2025:
· The FCA “Call for input: Future regulation of alternative fund managers”
· The Treasury’s “Open consultation. Regulations for Alternative Investment Fund Managers”
Melville Rodrigues co-ordinated the industry response through a working group of the associations. Melville is Apex Head of Real Estate Advisory and also a member of AREF’s public policy committee.
Paul Richards, CEO at the Association of Real Estate Funds: “These are very welcome consultations. And we are particularly pleased to see the focus on valuers - who are so fundamental to the international appeal of UK real estate. AREF has campaigned, on behalf of our members, for the removal of unlimited liability for external fund valuers ever since it became a requirement under AIFMD many years ago. We support this being changed in the UK and continue to support a change in the EU too.”
Melville Rodrigues co-ordinator of the real estate working group and Apex Head of Real Estate Advisory: “I am delighted government is considering whether “the liability for external valuers [appointed to UK alternative investment funds] be reviewed”. It is unfair that external valuers face unlimited liability under legislation. Valuers cannot obtain PI cover, so prevented from acting as fund external valuers. This means that fund investors lose out, as they are unable to benefit from valuations that are transparently external and independent from the manager. Over recent years, FCA and Treasury officials have constructively engaged with me on fixing this problem. I have had a lead industry role in proposing a legislative reform solution whereby a limit of liability can be agreed that is reasonable and proportionate to value of the fund assets. Terrific that this proposal has been endorsed by the [real estate] associations and has widespread industry support, and hopefully will be implemented in the reformed regulations.”
Chris Ormond, Knowledge & Innovation counsel in Goodwin’s Private Investment Funds group: “
The introduction of a new proportionate and appropriate regime for UK AIFMs is to be welcomed and also provides a potential opportunity for the UK government to facilitate greater EU/UK cross-border access. A question raised in our response is how existing firms are to be re-classified/grandfathered – in particular, any small AIFMs currently subject to the registration-only regime. Our preference would be not to have twin regimes in the future, but neither do we want all existing firms to have to immediately re-classify/re-comply where this involves unnecessary costs and compliance burdens.”
Jeff Rupp, Director of Public Affairs, INREV: “Beyond the important work of recommending updates to the regulation of the real estate investment industry, the close co-operation between a number of associations and stakeholders again resulted in tightly aligned views. It’s important for our industry and ensures that we present thought-through, consistent and coherent responses to policy makers.”
James Alder and Amelia Stawpert, Hogan Lovells: “We welcome HMT’s consultation and the FCA’s call for input as an important step in streamlining UK AIFMD rules. It is an excellent opportunity to address issues such as overlapping requirements for London listed real estate funds, external valuer liability and leverage.”
John Forbes, John Forbes Consulting: “We welcome HMT’s consultation and the “Improving UK AIFMD to create a simpler and more proportionate regime for the regulation of fund managers is an important step forward. It is important that the revised rules do not create regulatory cliff-edges nor arbitrage opportunities, for example between listed and unlisted funds. I am happy to have contributed to the draft consultation response, particularly on this aspect, which I believe is so key."
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View further information on AREF's work on this here.
For further information, please contact:
David Butcher, Communications and Content: 07834 350101 or [email protected]