By CRYPTOVERSE Legal Consultancy | September 2026
Two firms both describe themselves as “investment managers”.
The first raises capital into a fund, sets its investment strategy and is responsible for operating it. The second receives a mandate from a family office to make discretionary investment decisions for that family office’s portfolio.
They may buy the same shares and employ people with the same investment skills. Yet the FSRA permission each firm needs in ADGM may be different.
The distinction is between Managing a Collective Investment Fund and Managing Assets. It turns on the legal arrangement, whose assets are being managed and what responsibilities the firm assumes—not the job title on a business card. For a more in-depth guide refer to Public Fund vs. Exempt Fund vs. Qualified Investor Fund in ADGM.
The short answer
| If your business… | Permission to assess |
| Establishes, manages or operates a collective investment fund | Managing a Collective Investment Fund |
| Makes discretionary decisions over another person’s eligible assets or portfolio | Managing Assets |
| Operates a fund and manages separate client portfolios | Both permissions may be required |
| Gives recommendations without making investment decisions for the client | Assess Advising on Investments or Credit |
| Brings about investments or co-investments for others | Assess Arranging Deals in Investments |
This is a scoping guide, not an automatic classification. The final answer depends on the fund documents, client agreements, decision-making powers and any applicable exclusions or restrictions.
What does “Managing a Collective Investment Fund” cover?
Paragraph 59 of Schedule 1 to the ADGM Financial Services and Markets Regulations 2015 (FSMR) describes the regulated activity. A person manages a Collective Investment Fund if the person is legally accountable to unitholders for management of the fund property under its constitution or establishes, manages, otherwise operates or winds up the fund.
That second limb matters. A firm cannot decide its permission solely by asking, “Who places the trades?” The entity responsible for establishing and operating the fund may need Managing a Collective Investment Fund permission even where investment work is delegated.
First, however, there must be a Collective Investment Fund. FSMR section 106 addresses arrangements in which participants share in profits or income from property, lack day-to-day control over its management, pool contributions and returns, and have the property managed as a whole. The FSRA’s FUNDS Chapter 2 also sets out arrangements excluded from the Fund definition. An SPV or investment club therefore needs a substantive perimeter assessment before anyone assumes that the fund management permission applies—or that it does not as stated in ADGM Rulebook.
Example: A sponsor creates an ADGM private fund, invites investors to subscribe for units and takes responsibility for operating the fund under its governing documents. Managing a Collective Investment Fund is the central permission to assess for that sponsor’s management entity.
What does “Managing Assets” cover?
Paragraph 56 of Schedule 1 to the FSMR concerns the discretionary management of assets belonging to another person, where the assets include the types specified in that provision. The defining practical feature is the manager’s authority to make investment decisions for a client’s assets as stated in ADGM Rulebook.
Consider a family office that owns an investment portfolio. It appoints an ADGM firm to decide which investments to buy and sell within an agreed mandate. The firm is managing assets for the family office; it has not necessarily established or begun operating a fund.
A discretionary mandate should be distinguished from advice. If the client receives a recommendation but retains the decision whether to act, the firm should assess the Advising on Investments or Credit perimeter. If the firm can make investment decisions on the client’s behalf within the agreed mandate, Managing Assets comes into focus. The precise scope should be settled against the proposed agreement and activities, rather than inferred from the word “adviser” or “manager”.
The question that usually resolves the confusion
Ask: What does the client or investor own, and who is responsible for managing it?
| Arrangement | What the investor or client holds | Central permission question |
| Collective fund | An interest or unit in the fund | Who establishes, manages or operates the fund? |
| Discretionary portfolio | Assets managed for that client under a mandate | Who has discretion over those assets? |
| Advice-only relationship | The client makes its own investment decisions | Who is giving regulated investment advice? |
A fund investor’s position differs from that of a discretionary portfolio client. The fund investor subscribes into an investment arrangement governed by the fund’s constitution and offering terms. A portfolio client appoints a manager to exercise discretion over assets belonging to that client.
Those are useful working distinctions, but the contracts and actual conduct must support them.
Does a fund manager automatically have “Managing Assets” permission?
No. An FSRA Financial Services Permission specifies the regulated activities the firm is authorised to carry on. A permission to Manage a Collective Investment Fund should not be treated as a general licence to manage separate discretionary portfolios for family offices or other clients. A firm proposing both businesses should scope both activities in its application or assess whether a variation is needed.
The reverse is equally important. A firm authorised to Manage Assets should not assume that its permission allows it to establish or operate a Collective Investment Fund. Adding a fund business requires a fresh assessment of the proposed permission, fund category, governance and applicable FUNDS requirements.
The FSRA public register illustrates that permissions can be held together: it separately lists Managing Assets and Managing a Collective Investment Fund among the regulated activities of firms authorised for both to obtain a fund manager licence in ADGM.
What if one firm operates the fund and another selects investments?
This is where the distinction becomes commercially significant While structuring a crypto hedge fund in the UAE.
A fund may appoint another firm to perform investment management work. In that structure, the fund manager remains the entity whose responsibilities under the fund arrangement must be analysed under paragraph 59. The appointed firm’s own activities require a separate permissions analysis: if it exercises discretion over assets belonging to another person, Managing Assets may be relevant. The scope of delegation, contractual accountability and location of each activity all matter.
Do not assume that outsourcing investment decisions eliminates the fund manager’s regulated role. Equally, do not assume that every person providing research or recommendations to a fund needs the same permission as a discretionary investment manager. The answer follows what each party is authorised to decide and actually does.
The September 2026 reforms reinforce the need for precision here. Alongside the specialised fund manager routes, the FSRA addressed certain Institutional Fund Asset Managers providing investment management services to institutional funds. That is a specific framework with conditions, not a general rule equating Managing Assets with Managing a Collective Investment Fund.
Where do sponsors most often request the wrong permission?
“We are only setting up an SPV.”
An SPV may simply hold a particular asset. But a sponsor that raises pooled capital from passive investors for crypto VC fund legal structure in ADGM and makes discretionary investments through that vehicle should assess whether the arrangement is a Collective Investment Fund under FSMR section 106 and the relevant FUNDS Chapter 2 exclusions. The incorporation label cannot settle the FSRA licensing question.
“We manage funds, so we can also manage a founder’s personal portfolio.”
A separate discretionary portfolio is a separate service. Review the founder’s mandate and the manager’s FSP before providing it.
“Our firm advises the fund, so we are its fund manager.”
Advice, discretionary investment management and responsibility for operating a fund are different roles. Review the fund constitution, investment management agreement and advisory agreement to identify who performs each activity.
“We only arrange co-investments alongside our fund.”
Co-investment activity can require its own permission assessment. The FSRA’s September 2026 specialised guidance discusses restricted Advising on Investments or Credit and Arranging Deals in Investments permissions in connection with certain venture capital co-investments. The availability of that route depends on the proposed activities and applicable restrictions; it should not be assumed from an existing fund management permission.
How does the permission choice affect the application?
The FSRA asks applicants to describe their proposed regulated activities through its General Information for Regulated Activities (GIRA) form and applicable supplementary materials, including the Asset Management Appendix. The regulator then assesses the business model, people, financial resources and controls against the permission sought.
The permission decision can affect:
- The application narrative: Is the firm operating a fund, managing client portfolios, advising, arranging, or combining activities?
- Client and investor documents: Does the firm contract with a fund, its investors or individual portfolio clients?
- Personnel and controls: Who exercises discretion, oversees it and manages conflicts?
- Capital requirements: What prudential treatment applies to the complete set of proposed activities?
- The launch path: Does a Domestic Fund require FSRA registration or notification in addition to the manager’s authorisation?
This is why the permissions table should be drafted before the regulatory business plan and client documents are finalised.
A five-question FSRA permission test
If you are setting up an ADGM investment management business, answer these questions in writing:
- Is there a Collective Investment Fund? Assess the arrangement under FSMR section 106 and the FUNDS exclusions.
- Who establishes or operates it? Identify the person whose role falls to be assessed under paragraph 59.
- Whose assets are subject to discretionary decisions? Review each separate portfolio or delegated management mandate under paragraph 56.
- Who only advises or arranges? Map those activities separately instead of folding them into a general “asset management” description.
- Does the proposed FSP cover every actual activity? Check both the named permissions and any restrictions attached to them.
The decisive evidence is usually found in the fund constitution, management and advisory agreements, investment committee terms, client mandates and operating procedures. When those documents allocate decision-making differently from the regulatory business plan, the application needs to be corrected before submission.
At CRYPTOVERSE Legal Consultancy, ADGM fund setup and licensing services help sponsors and investment firms map their activities, select the appropriate FSRA permissions in ADGM, and align their applications with the funds and client services they intend to operate.
Disclaimer: This article provides general information, not legal advice for a particular business. The applicable permissions depend on the arrangement, contracts, assets, activities and any relevant exclusions or FSP restrictions.
FAQs
1. What’s the difference between Managing a Collective Investment Fund and Managing Assets in ADGM?
Managing a Collective Investment Fund applies to a firm legally responsible for establishing or operating a fund. Managing Assets applies to a firm making discretionary investment decisions over a specific client’s own portfolio, outside a fund structure.
2. Does having a fund management permission let me also manage individual client portfolios?
No. These are separate regulated activities. A firm wanting to do both must scope and obtain permission for each — one doesn’t automatically cover the other.
3. Is an SPV automatically exempt from the Collective Investment Fund rules?
No. If an SPV pools capital from passive investors and makes discretionary investments on their behalf, it may still meet the definition of a Collective Investment Fund under FSMR section 106, regardless of how it’s labelled.
4. If I only give investment recommendations without making decisions, what permission do I need?
Likely Advising on Investments or Credit, rather than Managing Assets — the key distinction is whether the client retains the final decision or the firm has discretion to act on their behalf.
5. Does outsourcing investment decisions remove a fund manager’s regulatory responsibility?
No. The entity legally responsible for establishing and operating the fund still needs Managing a Collective Investment Fund permission, even if investment decisions are delegated to another firm.