Test Content

.

New Pricing Structure - From 1 September 2026

Moving to the Standardised Fund Establishment Model

Upcoming legislation across the European Union is expected to require a clearer separation between a fund's investment capital and the commercial cost of establishing and running it.

As a consequence, IWG is transitioning away from its current entry-level fund establishment charge, and towards the externally funded, institution-grade model already used across the US and EU markets and which will be required to comply with the European standards.

.

Why This Change Is Happening Now

IWG's current fund establishment charge, set at 0.1025% of a fund's target value, has served the group well as a low-cost entry point for clients beginning a capitalisation journey. It has allowed IWG and its network of contributing service providers, eleven on average across a typical structure, to be compensated for the resources and participation committed at formation, without requiring the client to fund large sums up front.

However, this model carries a structural weakness: nearly all of the associated operating costs and recurring fees are drawn from inside the fund itself, once the fund is capitalised. Upcoming legislation across the European Union is expected to require a clearer separation between a fund's investment capital and the commercial cost of establishing and running it.

Under this direction of travel, a structure that continues to fund its own formation and operating costs from client capital will no longer meet the standard institutional regulators, auditors and rating agencies expect.

IWG is therefore moving, in a planned and orderly way, to the standardised model already established in the US and EU institutional fund markets, in which formation and operating costs are paid externally, from profits and management income, rather than from the fund's own assets.

.

The Current Model, For Reference

Under the existing arrangement, IWG charges 0.1025% of the target value of a fund at the point of establishment. All contributing service providers are secured from this single payment, in exchange for the reserve of their resources and participation. This covers:

• Bespoke fund creation

• Global market recognition

• Independent risk validation

• Institutional governance

• Professional fund management

• Direct capitalisation capability

• Investment to the full extent of the capitalisation target

IWG's entry-level funds begin at €200 million. Funds of this size are collectively managed by the same eleven service providers, on average, who would manage a fund of any scale, which is why an average fund of €1.5 billion makes far more sense from an economies-of-scale perspective.

IWG does create funds smaller than €200 million on request, though the cost of setup remains the same as for the €200 million entry point, which is why the entry-level fund is promoted as the practical starting point for a client's capitalisation requirement.

As an example, a client requiring an entry-level fund of €200 million currently pays, in advance of setup:

.

This charge is low because the ongoing cost of operation and other related costs and fees, the once-off costs and the repetitive fees alike, are paid from inside the fund once it is running. It is precisely this feature that the standardised model is designed to remove.

.

The Standardised Model IWG Is Adopting

Under the standardised model, the costs of legal structuring, documentation, licensing, administration, audit, listing and rating are budgeted and paid as a discrete establishment programme, funded externally and from profits, rather than levied against the fund's own capital. The fund itself is capitalised and invested from day one, without carrying the weight of its own formation.

Reference Case

Using euros, and assuming approximate parity with the Swiss franc for planning purposes, the following sets out a realistic budget for launching a Liechtenstein-based Alternative Investment Fund (AIF) with a Swiss exchange listing and an investment-grade credit rating. The EUR/CHF rate fluctuates, but for high-level budgeting these figures are sufficiently accurate.

Table 1 — Launch Cost Components

Table 2 — Total Launch Cost by Structure

Annual Operating Costs

Once launched, a fund under this model carries the following indicative annual operating expenses:

Table 3 — Annual operating cost, by category

.

Where The Economics Work

For a fund carrying a Swiss listing and an S&P or Moody's rating, the economics generally become attractive only at a meaningful scale:

Minimum practical launch size: €100–250 million Assets Under Management (AUM)

Preferred institutional size: €300–500 million+ AUM

At around €500 million AUM, annual operating costs typically represent well below 0.5% of assets, which is the point at which the structure becomes genuinely attractive to institutional investors. Where the objective is to attract pension funds, insurers, family offices and sovereign wealth funds, a suggested budget is approximately:

• €3–5 million for establishment

• €1–2 million per year in operating costs

• An initial fund size of at least €250–500 million, to achieve strong economies of scale

.

Why This is The More Stable Structure

The essential change is a simple one: costs move from inside the fund to outside it. Under the current model, the fund itself absorbs both the once-off setup costs and the repetitive running fees, which means the capital an investor commits is, in effect, funding its own administration before it is put to work.

Under the standardised model, those same costs are budgeted and paid externally, from profits and management income, so the fund's capital remains dedicated entirely to its investment purpose from the outset.

This has a direct effect on how the fund is perceived and who it appeals to. A structure that draws its running costs from client capital behaves, in practice, like an early-stage venture, exposed to cost pressure, dependent on scale being reached quickly, and vulnerable to investor concern about capital erosion before returns materialise. A structure that carries its costs externally, and is sized, rated and administered along US and EU institutional lines, behaves like the funds that pension funds, insurers, family offices and sovereign wealth funds are already used to allocating to.

In practical terms, this model is built for corporate and institutional clients rather than for startups or opportunistic capital raises. It assumes a client with the scale, patience and governance discipline to commit to a properly budgeted establishment programme, in exchange for a fund that is investment-grade rated, exchange-listed and structured to institutional standards from day one with a strategic exit opportunity.

It is not intended to compete on price for small or speculative mandates, and it is not designed to accommodate startup clients nor opportunist orientated clients or accommodate such levels of business, but rather attracts stable and established clients in stable economies globally.

.

Alignment With Senior Service Providers

Adopting this model also brings IWG's working practices into closer alignment with the audit, accounting and legal firms that institutional investors expect to see involved in a fund of this standing. Firms such as PwC, KPMG, Deloitte and EY, and legal counsel such as Norton Rose and DLA Piper, operate on precisely this basis, an externally funded establishment budget followed by transparent, market-standard operating fees, rather than costs recovered from within the investment vehicle itself.

• Audit & Accounting - PwC

• Audit & Accounting - KPMG

• Audit & Accounting - Deloitte

• Audit & Accounting - EY

• Legal Counsel - Norton Rose

• Legal Counsel - DLA Piper

• Risk Management – Integer Wealth Professional Services (IWPS)

Moving to this footing allows IWG to work with these firms on their own customary terms and strengthens the credibility of any fund IWG brings to market with an institutional audience.

.

In Summary

IWG's current 0.1025% establishment charge remains cheap only because it defers the true cost of running a fund onto the fund itself. Forthcoming EU legislation is expected to close off that approach.

IWG's move to the standardised model, an externally funded establishment programme followed by transparent annual operating costs, removes that stress from client capital, aligns IWG with the senior audit and legal firms institutional investors already trust, and positions IWG's funds for the corporate and institutional clientele the group intends to serve going forward.

IWG anticipates this change in cost structure to become effective between 1 September 2026 and 1 January 2027. All applications which are applied for and approved before this new dispensation comes into effect, will still be on the previous cost structure of 0.1025% of the target of the client fund.