Investor concerns about impending Financial Conduct Authority (FCA) rules on the liquidity of Non-UCITS Retail Schemes (NURS) has led to Church House Investment Management converting its Tenax Absolute Return Strategies fund to a UCITS structure.
In the wake of the liquidity issues that ultimately led to the collapse of Woodford Investment Management, in September last year the FCA announced new rules for NURS funds in efforts to ensure investors are "appropriately protected".
The new rules, which come into force on 30 September, aim to ensure NURS managers provide investors with clearer and "prominent" information on liquidity risks, and the circumstances in which access to their funds may be restricted.
It will also place additional obligations on the managers of funds investing in inherently illiquid assets to maintain plans to manage liquidity risk.
Church House IM director Sam Liddle said the decision to convert Tenax was made as the FCA's new NURS liquidity requirements "might have caused some doubts in the minds of investors and their advisers about the suitability of that type of fund structure".
He added: "Tenax has not used the slightly wider investment powers available to a NURS fund and we feel that a full UCITS structure is more appropriate and likely to be more acceptable to investors."
The £495m fund, which Liddle stressed "has always been a highly liquid" vehicle, will also cease to be an alternative investment fund and will therefore no longer be subject to AIFMD.
Managed by James Mahon and Jerry Wharton, there will be no changes to the process or management of Tenax.