UK vs EU Authorisation? Building the right regulatory base for your investment management strategy

3 February 2026

For investment managers launching or expanding internationally, the question is no longer whether to be regulated, but where to anchor the platform.

Both the UK and the EU offer credible, institutional-grade frameworks. Each provides distinct strategic advantages. The opportunity is choosing the jurisdiction that best supports your investors, distribution model and growth plans.

In practice, this means weighing authorisation with capital requirements, fundraising access, substance expectations and operational cost for years to come.

Here is how we frame the discussion constructively with founders and boards.

The UK route

Authorisation with the Financial Conduct Authority remains one of the most recognised regulatory badges globally.

The UK has positioned itself as a commercially pragmatic, principles-based market with deep institutional credibility.

Where the UK excels

Speed and proportionality: Applications for MiFID or AIFM-style structures tend to be more streamlined and commercially focused. The regulator is accessible and supervisory dialogue is typically direct and practical.

Cost efficiency: Lower ongoing levies, leaner substance expectations and simpler governance structures often mean lower fixed overheads, especially for emerging or specialist managers.

Global investor familiarity: US, Middle East and APAC allocators are extremely comfortable with a UK manager. For many strategies, London remains the default “home” jurisdiction.

Flexibility of structure: The UK supports a broad range of models, from start-up boutiques to sophisticated alternative managers, without mandatory EU depositary and passport mechanics.

Particularly well suited for

• Hedge funds and liquid strategies • SMAs and advisory models • Start-up managers prioritising speed to launch • Managers targeting primarily UK or global (non-EU) capital

The EU route

Operating inside the EU provides something structurally powerful: access to a single market of professional investors across multiple member states.

This framework is coordinated at European level by European Securities and Markets Authority and implemented locally through national regulators.

Where the EU excels

Marketing passport Authorised AIFMs can market funds to professional investors across the bloc without separate national registrations. For cross-border fundraising, this is a meaningful advantage.

Institutional governance framework Depositary oversight, formal risk management and valuation structures create a strong “institutional” signal that many European allocators expect.

Investor proximity For strategies focused on European pension funds, insurers or family offices, an EU presence can shorten fundraising cycles and reduce friction.

Regulatory alignment If portfolio assets, teams and service providers are largely European, having the manager regulated locally can simplify operations.

Particularly well suited for

• Private equity and venture funds • Private credit and real assets • Managers raising across multiple EU states • Firms needing passported distribution

A practical comparison

UK strengths Faster setup Lower fixed cost base High global credibility Operational flexibility

EU strengths Cross-border marketing rights Strong fund governance architecture Closer access to EU institutional capital Integrated single market distribution

Both are high-quality regimes. The choice is about alignment, not superiority.

Increasingly, the answer is “both”

Many scaling managers now adopt a dual structure:

• UK entity for portfolio management or trading • EU AIFM for passported fundraising

This combination captures the UK’s agility and the EU’s distribution reach. It is often the most efficient long-term architecture once AUM grows.

The UK offers speed, flexibility and global reach. The EU offers passporting, institutional governance and seamless European access.

When the regulatory base matches your commercial strategy, growth feels natural rather than constrained.

Selecting the right jurisdiction at the outset is one of the highest-leverage decisions a manager can make.