So you want to set up an investment fund, such as a Seed Enterprise Investment Scheme ("SEIS") or Enterprise Investment Scheme ("EIS") fund, a Business Relief ("BR"), property, or an LP/GP fund.
Awesome!
You have started researching and trying to figure out how it is done. I know it can be overwhelming with all there is to read and learn.
But don't stress.
We are here to help.
One of the key questions I am sure you are asking is - how long does it take to set up and launch an investment fund? I know this because I am asked this almost every day (well, not quite, but pretty often).
The answer.
Well, it depends.
In short, while in theory it could take as little as a month, in practice it usually takes longer. Of course, it will depend on the type of investment fund you want to launch.
(For a quick summary and FAQs, see the end of this article.)
To understand how long it will take, you first need to understand what needs to get done. Typically, the following is required for most funds to get them to the launch stage:
Select a fund manager (such as Sapphire 😉). There are many great UK-based fund managers out there (and we can recommend some if you want), but selecting the one that aligns with your ethos and that you feel comfortable working with (remember, you could be working with the manager for many years to come) can be time-consuming. Each may have a different charging structure or sector focus. For example, for Sapphire, we always insist on a share of the performance fee (since we believe it aligns our interests to make the fund a success for everyone), but some fund managers do not and only take a monthly fee. It may take time for you to decide which fund manager you are most comfortable working with.
Prepare the fund documents, including the information memorandum, the key information document (KID), and the application form (although that is usually now all digitalised). In short, the more that is written, the longer it will take to read, edit, and so on.
Most managers do a Section 21 review and sign off (as per the Financial Services and Markets Act 2000). A Section 21 review is a legal requirement that ensures all marketing documents are accurate and compliant with UK financial regulations. A Section 21 allows the documents to be promoted to a broader audience and not fall foul of the Financial Services and Markets Act. This can be highly time-consuming as everything needs to be checked. For example, suppose the information memorandum states that the tech sector went up by 10% in 2024. In that case, the entity doing the Section 21 will need some hard evidence to demonstrate this was actually the case. The more facts in the documents, the longer it takes to check them.
The fund manager will need to apply to the FCA to obtain permission to manage the fund (if it is an alternative investment fund). As we are dealing with a third party (being the FCA), the timing is somewhat of an unknown, but typically is circa two or three weeks. It can, of course, be longer if the FCA asks questions about the fund.
For most funds, a custodian, nominee, or administrator (who safeguards assets and manages fund operations) must be in place. Just like selecting a fund manager, this can take time to get the right fit (ask us if you need some recommendations).
There may be tax issues that need to be thought through and incorporated into the documents. This can also take significant time.
So with the above factors in mind, the following is roughly how long it should take (in our experience) to set up each type of fund (and note that this does not allow for the time taken to actually raise the money to launch the fund):
An SEIS fund: Given its simple structure (which does not require a legal entity to be set up), the process should take approximately a month. In our experience, it often takes two months. Why, you ask? Well, because by the time everyone has reviewed everything and given the go-ahead, this time has typically elapsed.
An EIS fund: This is the same as an SEIS fund. It should take a month (but often takes two months to get everything together).
A Business Relief (BR) fund: Again, hard to predict. It should be no more than two months.
A property fund: These are relatively straightforward to launch. It should not take more than two months.
An LP/GP fund: Ah, this is the harder one to predict. Since a legal structure is required (the partnership agreement and legal structure have to be set up before it launches), there are a lot more legal documents to be drafted and reviewed than with an SEIS or EIS fund. A bank account also needs to be opened, which can take a long time to arrange.
If you would like to contact us to inquire more about how to set up an investment fund, pricing, and options, fill out this form, and we will be in touch right away.
I am sure you will have other questions regarding setting up a venture fund.
Select a fund manager
Prepare fund documents (information memorandum, KID, application form)
Complete Section 21 review (compliance check for marketing materials)
Apply to FCA for fund manager approval
Appoint a custodian/administrator
Address tax considerations
Fund Type Typical Timeline:
| SEIS Fund | EIS Fund | BR Fund | Property Fund | LP/GP Fund | |
| Time | 1-2 months | 1-2 months | 2 months | 2 months | 2 months+ |
What is a Section 21 review?
A legal requirement ensuring marketing documents comply with UK financial regulations.
How long does FCA approval take?
Typically, two to three weeks, but it can be longer if questions arise.
What documents are required at each stage?
Who can invest in these funds?
What are the typical costs?
Can the process be expedited?
Next Steps:
Contact us for a detailed consultation or download our fund setup checklist.