Investment fund set-up in the UK is one of the most regulated routes in finance, but it is also one of the most powerful ways to direct capital. For women in business, the opportunity is growing. In 2026, THENA Capital became the first all-women investment team to win British Business Bank backing, closing a £45 million fund. The Bank’s Women Backing Women Fund is also deploying first capital from a £130 million vehicle aimed at women-founded businesses. Whether you plan to launch a venture capital fund, a private equity vehicle, or an impact fund, this guide explains the practical steps.
Before you start, be clear about the difference between raising investment for your own company and running a fund that invests other people’s money. This article focuses on the latter: how to set up and manage an investment fund in the UK.
1. Choose the type of fund you want to run
Investment funds fall into two broad categories. Open-ended funds, such as unit trusts and open-ended investment companies (OEICs), create and cancel units as investors buy and sell. Closed-ended funds, such as investment trusts, issue a fixed number of shares that trade on a stock exchange. Venture capital and private equity funds are typically structured as limited partnerships and are closed-ended.
Your choice affects regulation, investor type, and tax treatment. A venture capital fund targeting high-net-worth individuals and pension schemes needs different permissions from a retail OEIC.
2. Understand FCA authorisation
Almost anyone running an investment fund in the UK must be authorised by the Financial Conduct Authority (FCA). The exact permissions you need depend on what you do. Common permissions include arranging deals in investments, managing investments, managing an alternative investment fund (AIF), managing a UCITS scheme, and advising on investments.
The FCA’s Threshold Conditions set out the minimum standards for authorisation, including suitable premises, competent staff, and adequate resources. The Financial Services and Markets Act 2000 is the primary legislation governing this area.
3. Pick the right legal structure
The structure determines how investors are taxed, how the fund is governed, and how easily it can raise capital.
Limited partnership
Most UK venture capital and private equity funds use an English limited partnership or a Scottish limited partnership. The fund manager acts as general partner; investors are limited partners. This structure is tax-transparent, meaning profits and losses flow through to investors.
OEIC or unit trust
Retail funds are usually structured as OEICs or unit trusts. These are authorised by the FCA and can be marketed to retail investors. They require an authorised corporate director and a depositary.
Investment trust
An investment trust is a public limited company listed on the London Stock Exchange. It is closed-ended and can use gearing. This structure suits funds with a long-term, illiquid strategy.
4. Meet prudential and operational requirements
Your firm must hold enough capital to cover the risks it runs. The FCA’s Prudential sourcebook sets the rules, and the exact figure depends on your permissions and activities. You will also need a custodian or depositary to hold assets, anti-money laundering procedures, systems and controls for risk management, and professional indemnity insurance where required.
5. Build your strategy and team
A fund is only as credible as its strategy. You need a clear thesis, target sectors, deal sourcing plan, and exit strategy. You also need a team with the right experience. The FCA expects senior managers to be fit and proper, and the Senior Managers and Certification Regime applies to most fund management roles.
For women entering the sector, networks and programmes can provide introductions to limited partners and co-investors. The British Business Bank’s initiatives are a useful starting point, as is the wider community of women-led funds.
6. Budget for set-up costs and women-led funding routes
Launching a fund is expensive. Typical set-up costs include legal fees, FCA application fees, compliance consultancy, fund administration, audit, and marketing. FCA application fees vary by firm size and permissions; you should budget at least several thousand pounds for the application alone, plus ongoing regulatory fees.
Women-led funds are gaining institutional support. The Women Backing Women Fund has deployed first capital from a £130 million vehicle designed to increase investment in women-founded businesses, managed by the British Business Bank. In 2026, THENA Capital became the first all-women investment team to win British Business Bank backing, closing a £45 million fund. These programmes matter because all-women founder teams still received less than 2% of UK VC investment, according to the British Business Bank’s 2024 Small Business Finance Markets report.
The economic case is also strong. The Alison Rose Review of Female Entrepreneurship estimates that women-led businesses contribute £85 billion to the UK economy, and that up to £250 billion could be added if women started and scaled businesses at the same rate as men. You can find more context on the scale of women’s enterprise in the UK in Women in Business: Key UK Facts.
7. Action steps for investment fund set-up in the UK
- Define your fund type, strategy, and target investor base.
- Speak to an FCA-authorisation lawyer and a fund tax adviser.
- Apply for FCA authorisation with the correct permissions.
- Choose your legal structure and draft your limited partnership agreement or instrument of incorporation.
- Appoint a depositary or custodian, administrator, and auditor.
- Build your first-close investor list and prepare your pitch materials.
- Explore women-focused funding routes such as the British Business Bank’s Women Backing Women programme.
Investment fund set-up in the UK is not a quick side project. It demands regulatory clarity, a strong team, and patient capital. For women in business, the good news is that the infrastructure is improving: dedicated programmes, growing investor appetite, and visible role models make 2026 a realistic year to launch. Start with the FCA’s authorisation guidance, get specialist legal advice, and use the women-led funding routes now available.
