The concept of ‘Investment Fund 3.0’ represents the IA’s agenda for fund modernisation and innovation.
This concept, which originated from the ‘Investing For The Future’ report of 2022, recognises the need for the UK funds industry to adapt to the dual changes of technological advancements and the evolving behaviour and needs of 21st century investors.
Building upon the 150-year history of collective investment vehicles, which evolved into a second iteration in the 1980s with the emergence of ETFs featuring more modern characteristics, a third iteration is now necessary. This iteration aims to leverage technology more effectively and connect more effeciently with customers.
As we witness an accelerated pace of technological change in the era of blockchain and distributed ledger technology, this paper explores three potential scenarios for the future. It questions whether the investment fund of the future – Investment Fund 3.0 – will simply be a more efficient version of Investment Fund 2.0, or if the concept of the fund may undergo a transformation.
The IA identifies three potential paths for the UK funds industry to accommodate the dual changes of technological progress and the evolving behaviour and needs of 21st century investors. This has led to the creation of an organisational narrative for several complementary policy workstreams that will enable the sector to flourish in the modern era.
With UK funds now capable of implementing fund tokenisation, it can be said that the era of Investment Fund 3.0 has arrived.
This significant advancement in the investment fund industry has been achieved through close collaboration with the FCA and HM Treasury, facilitated via the Asset Management Taskforce. Further detail can be found in the 2023 report ‘UK Fund Tokenisation: A Blueprint for Implementation’, which is available below.
Key Publications
Further Fund Tokenisation: Achieving Investment Fund 3.0 Through Collaboration
March 2024
This second report from the Technology Working Group of the Asset Management Taskforce outlines the next steps for tokenisation within the UK funds industry. The era of 'Investment Fund 3.0' can only be fully achieved through industry collaboration and progressing the identified use cases. Through close engagement with HM Treasury and the FCA, the Group has shown where funds are able to complement the developments
Access the report here.
UK Fund Tokenisation: A Blueprint for Implementation
November 2023
The IA's 'Investment Fund 3.0' era has now arrived - fund tokenisation is permitted within the UK. This report from the Technology Working Group of the Asset Management Taskforce outlines an implementation plan for the tokenisation of the UK investment funds industry whose full value chain is operated on DLT.
Access the report here.
Investing For The Future
July 2022
As technology and investor behaviour evolve, this paper explores where the 150-year old investment funds industry may head next. Will the fund continue its incremental adaptation to the challenges and opportunities of today’s world? Will a more innovative evolution take place to connect better with customers? Or, alternatively, will it transform into a different kind of product altogether?
Access the report here.
Last Reviewed: 30-Jan-24 John Allan
