# Fund Manager > a person whose principal business is to make, manage or advise upon investments in securities; **Term:** Fund Manager **Last updated:** 2026-07-29 ## Definition ## What Fund Manager Means in a Contract A Fund Manager clause identifies the party responsible for making, managing, or advising on investments in securities. This is not a casual job title but a defined role carrying specific legal weight. Once a party is designated as Fund Manager, the contract typically attaches duties of skill, care, and loyalty, along with authority to act on behalf of investors or a fund vehicle. The definition matters because it distinguishes an active decision maker from a passive administrator, custodian, or adviser who merely provides recommendations without discretion. Contracts in the [finance](https://www.genieai.co/industry/finance) sector often use this distinction to allocate liability, since a Fund Manager exercising discretion bears different responsibilities than someone executing instructions from another party. The wording also signals regulatory status. In many jurisdictions, acting as a Fund Manager triggers licensing or authorisation requirements under the law governing the contract, so the contractual definition often mirrors statutory language to ensure consistency between the agreement and applicable regulatory frameworks. ## How Fund Manager Is Defined or Measured Most agreements define Fund Manager by reference to function rather than title: the person whose principal business is to make, manage, or advise upon investments in securities. This functional test avoids disputes over job descriptions and focuses instead on what the party actually does within the relationship. Some contracts add measurable thresholds, such as the percentage of business activity devoted to investment management, or require that the role be exercised on a professional, ongoing basis rather than incidentally. These qualifiers help separate genuine fund managers from occasional advisers or one off consultants. - Discretion over buy, sell, and hold decisions - Authority to allocate capital across securities - Responsibility for portfolio construction and rebalancing - Reporting obligations to investors or fund trustees Where a contract lists these functions, it becomes easier to determine whether a party genuinely qualifies as Fund Manager or falls into a related but distinct category, such as adviser or custodian. ## Where Fund Manager Appears in Agreements The term commonly appears in investment management agreements, fund constitutional documents, and delegation agreements where a fund board or trustee appoints a manager to run day to day investment activity. It also surfaces in service agreements between financial institutions and third party managers, and in disclosure documents aimed at investors. Outside pure fund documents, the concept can appear in [business acquisition agreements](https://www.genieai.co/en-us/template-type/business-acquisition-agreement) when a target company's management contracts are being reviewed, since acquiring a business that includes fund management functions raises additional regulatory due diligence questions. It may also surface in consultancy arrangements within the [consultancy](https://www.genieai.co/industry/consultancy) sector where investment advice blurs into active management. Contracts touching insurance linked investment products, found in the [insurance](https://www.genieai.co/industry/insurance) industry, frequently reference Fund Manager roles when policyholder funds are invested in underlying securities portfolios managed by a third party. ## Why the Exact Wording Matters Precise wording determines who is legally accountable for investment losses, fee entitlements, and compliance failures. A contract that vaguely references an investment adviser rather than a Fund Manager may unintentionally shift or dilute fiduciary style duties, leaving investors with weaker protections than intended. The wording also affects how liability caps, indemnities, and termination rights operate. If a party is deemed a Fund Manager under the contract but lacks the regulatory authorisation that role requires, the agreement itself could be challenged or rendered unenforceable in certain respects, exposing both parties to unexpected risk. Clear definitions reduce ambiguity when disputes arise over whether a loss stemmed from a managerial decision within the Fund Manager's discretion or from following explicit client instructions, a distinction that often determines where liability ultimately falls. ## Drafting Considerations Drafters should tie the definition of Fund Manager to specific, verifiable functions rather than generic titles, and cross reference any regulatory definitions relevant under the law governing the contract. This alignment reduces the risk of inconsistency between contractual and statutory meanings. It is also worth specifying the scope of discretion granted, reporting frequency, fee calculation methods, and the standard of care expected, whether that is a best efforts standard or a stricter fiduciary duty. Ambiguity here often leads to disputes long after the relationship has ended. Finally, consider including clear termination and succession provisions in case the Fund Manager loses authorisation or ceases to meet the functional definition, since a gap in management authority over investment assets can create significant exposure for investors and fund vehicles alike. ## Context ### Relevant circumstances - When a person makes or advises on investments as their main business - If FCA authorisation requirements apply to the fund manager role - Where a fund manager's appointment, fees and replacement need to be defined ### Relevant sectors - Finance - Consultancy ## Relevant contract types - [Business Acquisition Agreement](https://www.genieai.co/en-us/template-type/business-acquisition-agreement) --- This is the Markdown representation of [https://www.genieai.co/en-us/define/fund-manager](https://www.genieai.co/en-us/define/fund-manager), provided for AI agents and crawlers. The HTML page is canonical. 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