CP26/28: what the FCA's AIFM overhaul means for the host AIFM model

As Managing Partner of Infinity Asset Management, my team have spent the past few days going through the FCA's CP26/28 in detail and I think it's worth sharing a view from the host AIFM side of the table, not just the regulatory summary everyone else is posting.

The headline changes are well covered elsewhere: a higher small-AIFM threshold (£750m NAV, up from the originally proposed £100m), the scrapping of the commitment and gross leverage calculations, and a genuinely more proportionate risk and liquidity framework for closed-ended, unleveraged strategies. But the question I keep coming back to is: what does this do to the case for going via a host, rather than seeking direct authorisation?

A few reflections:

The case for hosting gets stronger in the early years. A wider small-AIFM band means more emerging managers can stay in a lighter-touch regime for longer as they build track record and AUM. In my opinion that's exactly the phase where a host AIFM adds the most value - compliance infrastructure, governance, and regulatory relationship management without the manager needing to build all of it from day one. If anything, a more generous threshold makes the "grow inside a host, spin out later" pathway more viable, not less.

Simplified reporting lowers the operational bar for everyone. The proposed move to the FCA’s new FRAME reporting regime, alongside the removal of AIFMD style leverage based categorisation, should reduce reporting complexity and compliance costs for many managers. That's good for our Appointed Reps under our umbrella, but it also modestly narrows the gap between what a manager can credibly do themselves versus what they need a host for. We shouldn't pretend that doesn't cut both ways.

Where hosts genuinely earn their keep going forward: the delegation rules, the disclosure regime split between professional and retail investors, and the annual reporting requirements all still carry real substance and judgement calls. Objective reasons for delegation structures, materiality assessments for investor disclosures, valuation governance. This is exactly the kind of ongoing, principles-based interpretation that a good host AIFM is built to carry, and no amount of simplification removes the need for someone to own it properly.

The direct-authorisation path is becoming more attractive at the margin worth being candid about that with prospective managers rather than glossing over it. Our value proposition has to be about speed to market, quality of oversight, and taking the regulatory and operational burden off a manager's desk, not regulatory complexity for its own sake.

For managers currently in the registered AIFM population who may need to transition to FCA authorisation before the new regime takes effect in 2028, I'd expect host AIFM enquiries to increase over the next 18 months. If you're in that position, or advising firms who are, it's worth starting the conversation early rather than waiting until the implementation deadline approaches.

The FCA is seeking responses on certain discussion chapters by 18 September 2026 and on the main consultation by 14 October 2026. We'll be responding and we'd welcome hearing how other host AIFMs are reading the proposals