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.
The model for this type of arrangement is the Fonds commun [de placement] common in France and Luxembourg.
The common contractual fund in Ireland is another prominent example.
Legal structure
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.Under French law, for example, a *fonds commun de placement* 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.