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An unauthorised fund, sometimes also referred to as an unregulated fund, is one that is not regulated or authorised by the local regulator, although the fund manager itself will often be authorised and governed by regulations. Common unregulated fund structures include unauthorised unit trusts, limited partnerships (as used by private equity fund managers) and investment trusts.
In December 2012 a study by law firm Allen & Overy found that although unregulated or lightly regulated funds were one of the most promising alternatives to bank lending, their ability to step in could soon face restraints due to new rules that would combine to make credit more expensive.
Likewise in January 2013 it was reported that private equity and hedge fund managers in Europe would struggle to meet new requirements for unregulated funds, including having to find a depositary for the fund.