Why Is an EU Fund Easier to Sell in the UK Than a UK Fund?
An existing EU UCITS can reach UK investors through the Overseas Funds Regime (OFR) without the manager having to set up a separate UK-domiciled fund. For managers already established in Dublin or Luxembourg, that can make one EU vehicle the more commercially efficient route into the UK as well as Europe.
That's the starting point for episode four of The Roadmap to £10bn Podcast, where Zeyro's Wayne Green is joined by Giles Swan: public policy and regulatory consultant, and former UK financial regulator with 25 years of international experience across investment services, digital assets, and payments.
Let's explore why fund structure comes before the investment pitch, and why UK versus EU domiciliation carries more weight commercially than most managers assume going in.
Two Questions Before Anything Else
Every regulatory application starts with the same two questions: what is the fund going to do, and who is it going to be sold to?
"First thing you got to work out is what is it your fund's going to do," Wayne says. "And then the second bit is who are you going to sell that fund to: those are the very basic, fundamental parts of page one of your regulatory application."
These sound simple (but they rarely are). The temptation, especially for managers coming from outside the UK, is to answer them as broadly as possible, keeping every option open. That instinct backfires the moment a regulator asks for real specificity, and it shapes everything from UCITS versus non-UCITS eligibility to whether an asset class like real estate can sit inside the vehicle at all.
No Regulator Is Just Checking Boxes
A common assumption is that a well-drafted application is mostly a compliance exercise. Submit, wait, get approved.
"No regulator is just checking the boxes," Giles explains. "It's a much more in-depth piece of review and scrutiny than that."
Regulators want model portfolios that match the stated strategy, evidence it's been stress-tested, and clarity on how the fund's structure genuinely supports what it claims to do.
That scrutiny extends into who's running the portfolio, where they're regulated, and how cross-border delegation arrangements hold together.
The Overseas Funds Regime Changed the Economics
Post-Brexit, EU UCITS funds distributing into the UK operated under a temporary permissions regime: free, with no added hoops. That's gone. We covered the shift when the OFR landing slots first opened, and the regime now requires FCA recognition before a fund can be marketed in the UK at all: a process we break down in When Overseas Investment Funds Need UK Marketing Recognition.
Recognition, in most cases, means appointing a UK-based financial promotion approver. It's a real added cost that didn't exist under temporary permissions. It's still often cheaper and faster than building a UK UCITS from scratch, particularly for managers already set up in Dublin or Luxembourg who want distribution across multiple jurisdictions.
Getting your financial promotion approvals sorted early is now part of market-entry planning, not an afterthought, and it's worth understanding the UK financial promotion rules under OFR and Section 21 FSMA before you get too far into the application.
Value, Cost, and Justifying a Higher Fee
Fees get assessed differently depending on where your fund sits. The UK's value assessment regime asks whether charges are justified by the outcome delivered, benchmarked against comparable products. The EU's "undue costs" framework covers similar ground. EU UCITS distributed into the UK under the OFR aren't required to produce a UK value assessment report: though running the exercise voluntarily tends to mean the UK's tougher bar gets cleared too.
"What a higher fee does is guarantee it will be harder for you to repeat that outperformance in the future," Giles notes, "because your charges are going to erode your future performance more than the cheaper fund's charges." Charging more isn't prohibited. It invites scrutiny, and "why are you more expensive" needs a real answer.
This is the same logic that sits behind why your fund's investment objective either opens doors or closes them: clarity and justification do more commercial work than most managers expect.
Beyond the Product: The Firm Behind It
Regulators look at the firm running the fund, not just the fund itself. Who's doing the portfolio management, where they're regulated, and whether delegation arrangements across borders genuinely hold up.
"What do I invest in? Who do I sell it to? And where are they?" Giles summarises. "There's not really three bigger things than that." Getting the structure right is the foundation for everything that follows: a point our UK distribution infrastructure page covers in more detail.
Where to Start
Fund structure is the first domino. Get it wrong, and everything downstream (your distribution channels, your fee justification, your platform listings) inherits the problem.
If you're weighing up UK versus EU domiciliation, or trying to work out whether your current structure is helping or quietly working against you, The Roadmap to £10bn is where to start.
