Common fund

A common fund is a form of collective investment scheme based upon contractual law rather than being enacted through a trust, corporation or insurance policy.[1]


The model for this type of arrangement is the Fonds commun de placement common in France and Luxembourg.[2] 

The common contractual fund in Ireland is another prominent example.[3]

A common fund is typically established under contractual law rather than through a corporate or trust structure. Under this model, the fund itself has **no separate legal personality**; instead, assets are held collectively on behalf of unitholders and managed by an authorised management company on their behalf. As a result, the management company and its custodian have responsibility for the fund’s assets, but the fund itself cannot hold assets or incur liabilities in its own name.[4][5]

Under French law, for example, a *fonds commun de placement* (FCP) functions as a collective investment scheme without legal personality, where investors co-own the fund’s assets proportionally to their units. The management company acts in the name of the fund to manage and invest the assets, while a separate custodian holds the assets on behalf of the unitholders.[6]

See also

References

  1. ^ The Granting of Treaty Benefits with Respect to the Income of Collective Investment Vehicles. Organisation for Economic Co-operation and Development. 2010.
  2. ^ "Fonds commun de placement (FCP)". Autorité des marchés financiers. Retrieved 2025-01-13.
  3. ^ "Ireland's Common Contractual Fund | Deloitte Ireland". www.deloitte.com. Retrieved 2025-01-13.
  4. ^ "Fonds commun de placement (FCP) definition". Board of the Fund for the Americas. Retrieved 27 January 2026.
  5. ^ "Alternative investment fund structures in France". International Comparative Legal Guides. Retrieved 27 January 2026.
  6. ^ "What you need to know about collective investments (including FCPs and SICAVs)". Autorité des marchés financiers (AMF). Retrieved 27 January 2026.
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