The ADGM Sub-Threshold Fund Manager: Who Qualifies Under the USD 200 Million Committed Capital Limit?

By CRYPTOVERSE Legal Consultancy | September 2026

A fund sponsor plans to launch its first ADGM private equity fund with a target size of USD 120 million. Investors have signed commitments for USD 90 million, but the fund has called for only USD 25 million.

Is the manager below the USD 200 million Sub-Threshold Fund Manager limit?

On those figures, yes—but the relevant number is USD 90 million, not USD 25 million. The remaining USD 65 million is still committed capital if investors are contractually obliged to provide it when called. And if the same manager already runs another fund, that fund’s commitments must be counted too.

This is where many initial assessments of the ADGM Sub-Threshold Fund Manager (STFM) licence go wrong. The threshold applies to the manager’s funds collectively, and satisfying it is only one part of the eligibility test.

What is an ADGM Sub-Threshold Fund Manager?

The STFM framework is a specialised route for an FSRA-authorised firm carrying on Managing a Collective Investment Fund. It was formalised as part of the FSRA’s September 2026 enhancements to its funds framework, which introduced streamlined requirements for eligible managers of smaller funds. An applicant still needs a Financial Services Permission (FSP); an existing authorised fund manager seeking STFM status applies to vary its permission. The FSP is subject to a restriction identifying the manager’s STFM status. 

The word sub-threshold should therefore be read carefully. It identifies a regulated fund manager operating within defined limits. It does not mean that fund management below USD 200 million is unlicensed.

The eligibility test: four conditions, not one

The FSRA’s Supplementary Guidance – Regulatory Framework for Specialised Public Fund vs. Exempt Fund vs. Qualified Investor Fund in ADGM Fund Manager Categories sets out four conditions for the STFM framework:

Each condition matters. A manager with USD 40 million of commitments may still be ineligible if it proposes an open-ended fund or a fund open to Retail Clients.

What exactly counts as “Committed Capital”?

The ADGM Glossary defines Committed Capital as the total capital committed by subscribers for units in a fund. It includes both contributions already drawn and undrawn contributions that subscribers are contractually obliged to make when the fund manager calls them.

Put simply:

Committed Capital = drawn contributions + legally binding undrawn commitments.

It is a different measure from cash in the fund’s bank account, capital already deployed, or the current value of its investments.

Consider a fund whose investors have committed USD 80 million. The manager has called USD 20 million and invested USD 15 million.

The manager cannot use USD 20 million—or USD 15 million—as its threshold figure merely because the rest has not yet been called.

A fundraising target also needs separate treatment. A proposed USD 150 million target is relevant to the FSRA’s assessment of the business plan, but the legal definition turns on capital committed by subscribers. If the manager plans to accept further commitments, it must assess the effect before doing so.

Is the USD 200 million limit per fund?

No. It applies across all funds managed by the same manager.

Suppose an ADGM firm manages:

• Fund A: USD 85 million of committed capital;
• Fund B: USD 70 million; and
• Fund C: USD 35 million.

Its aggregate is USD 190 million. It has USD 10 million of headroom under the STFM capital threshold, assuming the other eligibility conditions are met.

If it then proposes to accept USD 15 million in additional binding commitments, the aggregate would become USD 205 million. The FSRA guidance says an STFM intending to take on commitments that would exceed the threshold must apply to vary its FSP in advance of accepting them. The same advance variation requirement applies if it wishes to manage a fund that does not satisfy the other STFM criteria. 

This makes commitment monitoring an ongoing licensing matter. A manager needs a reliable view of commitments across its portfolio, including proposed closings and increases to existing funds.

Do ADGM and foreign funds both count?

Yes. The FSRA’s test refers to all funds managed by the applicant or authorised person. The guidance expressly contemplates eligible Foreign Funds as well as ADGM Exempt Funds and QIFs. A firm should not assume that a fund is outside the calculation because its vehicle is incorporated elsewhere. 

For example, a manager with USD 110 million committed to an ADGM Exempt Fund and USD 75 million committed to an eligible foreign closed-ended fund has an aggregate of USD 185 million for this assessment.

The analysis should follow the actual manager and the funds it manages, rather than stopping at the jurisdiction printed on each fund’s incorporation documents.

Which funds can an STFM manage?

The framework is intended for closed-ended funds without Retail Client investors. In ADGM, that points to Exempt Funds and QIFs; equivalent non-retail Foreign Funds may also qualify. An open-ended fund, or one available to Retail Clients, falls outside the STFM criteria even when its committed capital is well below USD 200 million.

The STFM framework is not confined to venture capital. The FSRA guidance states that STFMs are generally not limited by the asset categories in which their funds may invest. The proposed strategy must still comply with the rules applicable to the relevant fund, and any other activity or specialist requirements must be assessed on their own terms.

That distinction matters for a sponsor planning, for example, a private equity, real estate or other private investment strategy: the fact that it is not a venture capital strategy does not, by itself, rule out STFM status.

Where does the Venture Capital Fund Manager fit?

A Venture Capital Fund Manager (VCFM) is treated as a subcategory of STFM. It must satisfy the STFM eligibility conditions, including the aggregate USD 200 million committed capital limit, but may manage only funds that qualify as Venture Capital Funds under the applicable FUNDS rules.

Under Crypto VC fund legal structure in ADGM a sponsor should therefore choose the description that matches its investment mandate. A manager proposing a broader range of private funds should not present itself as a VCFM simply because some investments will be in startups. Conversely, a manager dedicated to qualifying VC Funds should assess the VCFM-specific framework and guidance.

What does the streamlined framework change?

An eligible STFM benefits from specified regulatory dispensations. In particular, the FSRA guidance states that an STFM is not required to establish a formal internal audit function or appoint a Finance Officer. Its Base Capital Requirement is USD 50,000, and an Expenditure Based Capital Minimum does not apply to the STFM. 

These figures require care. USD 50,000 is a regulatory capital requirement for the manager, not the amount a fund must raise and not the minimum an investor must subscribe.

The guidance also states that other applicable prudential requirements continue to apply, including requirements concerning liquid assets, operational risk and professional indemnity insurance. The manager remains responsible for the applicable fund, conduct, governance and compliance rules. Its prospectus is expected to disclose its STFM status and restrictions so investors can assess the arrangement on an informed basis of ADGM. 

Five questions to ask before applying

A sponsor considering an FSRA Sub-Threshold Fund Manager licence in ADGM should resolve these points at the outset:

1. What funds will this entity actually manage? Include existing and proposed ADGM and foreign funds in the assessment.
2. What are the binding commitments across those funds? Separate drawn capital, undrawn commitments and aspirational fundraising targets.
3. Who can invest, and can units be redeemed? Check the proposed fund terms against the non-retail and closed-ended conditions.
4. Will the firm act as the substantive manager? The STFM guidance excludes a proposed “host” fund manager model.
5. When might the business outgrow the permission? Model planned closings and future funds early enough to seek an FSP variation before accepting commitments that would breach the limit.

The practical takeaway

The USD 200 million limit is an important gateway to the ADGM STFM framework, but it is not a licence exemption and it is not measured by cash already raised. It captures drawn and contractually binding undrawn commitments across all funds managed by the firm.

The right question for a sponsor is therefore broader than “Is my first fund under USD 200 million?” It is: “Does my proposed management business, across every fund it will manage, satisfy all the STFM conditions now and as it grows?”

CRYPTOVERSE Legal Consultancy assists sponsors with that assessment, ADGM fund setup and licensing services, fund and manager structuring, FSRA permission scoping, and preparation for the ADGM authorisation process.

Disclaimer: This article provides general information, not legal advice for a specific fund or applicant. Eligibility depends on the proposed funds, investor terms, management arrangements and the FSRA’s assessment.

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