CurveBlock
REITs are listed or unlisted companies that meet specific tax and distribution tests and typically offer corporate governance safeguards associated with company law. Unit trusts and OEICs are collective investment vehicles regulated for investor protection, with trustee or depositary oversight. Special purpose vehicles (SPVs) and limited partnerships are commonly used for property and project financing; they can be tax-efficient and flexible but often rely on contractual governance rather than the full range of corporate protections.
Investor protections differ materially. Regulated collective investment schemes have prescribed reporting, custody and oversight arrangements. In contrast, SPVs may grant priority rights to project lenders and limited governance rights to equity holders, leaving minority investors dependent on contractual terms for vetoes, information rights and exit mechanisms. Insolvency priorities, trustee duties and regulatory safeguards (such as those enforced by the FCA where applicable) all change the risk profile for small investors.
When fund shares are fractionalised into digital tokens, the underlying legal vehicle remains determinative. Tokenisation can improve transferability and record-keeping but cannot on its own create statutory protections absent the chosen legal wrapper. Retail investors should therefore map token rights back to the governance and creditor structures of the underlying vehicle to understand their voting, income and recovery prospects when considering fractional digital share investments.