How much will it cost?

There are various levels of cost; initial and ongoing.

Application and start-up costs: the costs of engaging a professional to assist with the application process and the costs of establishing the legal entity and preparing any LLP agreement for any applicant which is a limited liability partnership

FCA costs: the FCA charges a fixed application fee, which is £5,000 for a portfolio manager (which will include any firm whose permission includes managing an AIF) submitting a “moderately complex” application. Please note that additional fees may apply for each AIF registered or notified to the FCA for managing and/or marketing under AIFMD

Expert adviser costs: depending on your business, you may need assistance to complete/review an IT Controls form for the FCA and help with preparation of financial projections and calculation of regulatory capital requirements

Regulatory capital costs: the FCA rules require firms to carry a minimum amount of capital which depends on the activities of the business and the size of the business:

If the firm is a MiFID firm, the capital requirement is likely to be a minimum of €50,000 and unless it is an exempt CAD firm, the business will also be required to carry, if greater, an amount equal to at least 13 weeks’ expenditure, based on projected expenditure forecasts provided to the FCA. (An exempt CAD firm is limited to carrying on advisory and arranging activities; it cannot carry on discretionary management activities or deal in investments for its clients)

Where a firm is an AIFM, the capital requirements will be governed by and calculated according to AIFMD (and will be dependent on its fixed overheads, and the value of the assets under management). An AIFM must hold, at a minimum, the sum of (i) €125,000; (ii) the greater of (a) one quarter of its projected annual fixed overheads amount or (b) own funds equal to 0.02% of the amount by which the value of the funds under management (calculated according to AIFMD) exceeds €250m; and (iii) an additional amount to cover professional liability risks or appropriate PII cover.