IFM36410 - Co-investment: Co-investments made by managers

Co-investment

Co-investments made by managers

ITA07/S809EZB(1)(b)

A co-investment refers to an investment that a manager holds in an investment scheme that they are also involved in managing. Fund managers may make a personal contribution to a fund as a co-investment; alternatively they may acquire a co-investment from another person.

Returns of such managers’ co-investments in funds or returns on those investments are excluded from being disguised fees, provided that they are calculated on an arm’s length basis (IFM36420).

If a sum received does not fall within the definition of “an arm’s length return” within ITA07/S809EZB(2) (IFM36420), then it is likely that it will be treated as a disguised fee (IFM36300) and subject to income tax in its entirety.