Due Diligence Matters – September 2026 Bulletin

Please click here to read our July edition and please click here to watch our video which introduces perfORM and each of our of core ODD services.

Our clients are global and diverse, including Investment Managers, Allocators (e.g., Family Offices/Multi-Family Offices, Private Banks, Wealth Managers, Funds of Funds, Asset Managers, Pension Funds, Endowments, Foundations), Third Party Service Providers and Sports Teams. Please contact us if you would like to discuss support, or to receive sample ODD Reports, thank you.

Our Co-Heads, James Newman & Quentin Thom will be in NYC w/c 21st September and would be pleased to meet, if timely and useful.

JTC is Now a Private Company as Permira Acquisition Completes

JTC and Permira Advisers LLP (“Permira”) announced that Permira’s £2.7 billion acquisition of JTC, by funds advised by Permira, alongside Canada Pension Plan Investment Board, has completed. The deal saw the company de-list from the London Stock Exchange and is now a private company.

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New proposed rules for UK Alternative Investment Fund Managers

On 14 July the FCA published three linked consultations (CP26/26, CP26/27 and CP26/28), alongside HM Treasury publishing a draft statutory instrument that would transfer much of the detailed rulemaking responsibility for the UK AIFM regime to the FCA. Together, these proposals represent the most significant overhaul of UK fund regulation since the AIFMD rules were introduced in 2013. Their objective is to reinforce, post-Brexit, the UK’s position as a leading asset management jurisdiction by creating a regulatory framework that is more consistent, proportionate and less complex, while continuing to safeguard investor protection and market integrity.

What are the proposed changes?

Under CP26/28, most AIFM rules would be consolidated into a single FCA sourcebook. Currently a firm must be a full-scope AIFM if it manages more than €100m (including leverage) or €500m (unleveraged, with no redemption rights exercisable for five years), with thresholds measured using gross assets under management. Below those thresholds, a firm is a small AIFM — either authorised or, for a narrow group of managers, registered. The FCA would replace this with three tiers based on the aggregate net asset value of the AIFs a firm manages: small (below £750m), medium (£750m to £5bn) and large (above £5bn), with graduated requirements and numerous carve-outs for unleveraged closed-ended funds. Some noteworthy points:

• Valuations: adequate recordkeeping and consideration of external valuation where required, facilitated by HMT proposals to remove the strict liability that applies to external valuers. Small AIFMs, which are not currently subject to specific valuation requirements, would be required to maintain valuation policies that are reviewed regularly.
• Leverage: removal of ‘gross method’ calculation in favour of whichever method best suits the strategy, provided it is fair, clear and not misleading, and removal of the commitment method for FCA reporting.
• Risk and liquidity management: AIFMs managing AIFs that are not unleveraged and closed-ended would need to establish a dedicated risk management function. Subject to proportionality for small AIFMs, this function would need to be functionally independent. Small AIFMs would be required to maintain liquidity management policies aligned with their investment strategy and conduct annual stress testing, with additional requirements applying to larger firms.
• Delegation: pre-notification to the FCA dropped in favour of notification once delegation is in place. Three new ‘core’ functions — valuations to third party valuers, regulatory compliance monitoring and marketing — would face greater control.
• Reporting and disclosures: both more principles-based, with baseline requirements for AIF financial statements and audits for medium and large firms’ AIFs. Disclosure requirements for professional investors would become more flexible, while those for retail investors would remain largely prescriptive.

CP26/26 proposes a streamlined reporting framework, FRAME, with ‘Essential’ requirements for AIFMs below £500m NAV and ‘Enhanced’ above. CP26/27 would merge the AIFM, UCITS and MIFIDPRU remuneration codes into one outcomes-focused regime, leaving decisions around deferral of bonuses largely to the firm’s management body.

Key Dates

The FCA extended the feedback deadlines for CP26/26 and CP26/28 to 22 October (although 18 September is deadline for CP26/28 discussion chapters). For CP26/27 the deadline remains 16 September.

The FCA currently expects final rules to be published in 2027, with implementation envisaged for 2028.

Our take

The FCA’s move towards a simpler and more proportionate rulebook is a positive development and, as noted by the regulator, could reduce low-value compliance activity and save the industry an estimated £128 million annually.

There is a potentially interesting effect from the proposed registration thresholds and the change of measurement basis. For new emerging managers, the lighter-touch regime itself becomes more demanding: valuation policies, liquidity management policies and annual stress testing would apply for the first time. Conversely, a manager running £500m of NAV with leverage is full-scope today but a small AIFM tomorrow resulting in removal of certain requirements, including the obligation to appoint a depositary.

As regulatory safeguards become more proportionate, investors may need to place greater reliance on operational due diligence to assess key non-investment risks. Areas such as asset verification, cash controls, service provider oversight and governance arrangements could become increasingly important when evaluating alternative asset managers that are subject to a lighter regulatory framework.

ODD Report Solution Clients

• Investment Manager: Hivemind Capital Partners UK LLP – please contact here to request access to our June 2026 dated ODD Reports 
• Investment Manager: MNNC Advisors (Cayman) SEZC – please contact here to request access to our June 2026 dated ODD Reports 
• Investment Manager: Fasanara Capital Limited – please contact here to request access to our January 2026 dated ODD Reports 
• Investment Manager: MARK Capital Management LP – please contact here to request access to our January 2026 dated ODD Reports 
• Investment Manager: 24 Capital Management Ltd – please contact here to request access to our January 2026 dated ODD Reports 
• Investment Manager: Temple Capital Management, Ltd – please contact here to request access to our December 2025 dated ODD Reports 
• Investment Manager: Noble Capital Management (NCM) SA – please contact here to request access to our December 2025 dated ODD Reports 
• Investment Manager: Edge Capital Investment Management, LLC – please contact here to request access to our December 2025 dated ODD Reports
• Digital Asset Service Provider: Liquidity Technologies Inc – please contact here to request access to our November 2025 dated ODD Report. 
• Investment Manager: Redhedge Asset Management, LLP – please contact here to request access to our July 2025 dated ODD Report. UNDERGOING RENEWAL PROCESS
• Digital Asset Service Provider: Copper Technologies (Switzerland) AG – please contact here to request access to our June 2025 dated ODD Report. UNDERGOING RENEWAL PROCESS
• Investment Manager: Hyperion Decimus, LLC – please contact here to request access to our June 2025 dated ODD Report. UNDERGOING RENEWAL PROCESS
• Investment Manager: GrandLine Investment Management Ltd – please contact here to request access to our March 2025 dated ODD Report. UNDERGOING RENEWAL PROCESS
• Investment Manager: Gemcorp Capital Management Limited – please contact here to request access to our January and March 2025 dated ODD Reports
• Investment Manager: Eltican Asset Management SAS – please contact here to request access to our July 2024 dated ODD Report
• Investment Manager: Coral Cove Capital Ltd – please contact here to request access to our January 2024 dated ODD Report.