UK government should implement regulatory reforms and tax policies that foster the alternative asset management industry
London, UK — MFA recommended HM Treasury (HMT) prioritize strengthening the UK’s position as a global hub for alternative asset management in a letter submitted today. The letter is in response to HMT’s Financial Services Growth & Competitiveness Strategy call for evidence.
The letter calls for modernizing the UK’s regulatory framework to better support the alternative asset management industry. This includes reforming the UK transaction reporting regime to eliminate duplicative requirements, particularly for derivatives trades, and completing the Edinburgh Reforms. Such changes would reduce compliance burdens, lower costs for firms, and enable alternative asset managers to drive economic growth without sacrificing financial stability. Additionally, the letter advocates for harmonizing UK regulations with international standards to facilitate cross-border investment and maintain the UK’s competitive edge.
“MFA commends the Government for embracing the alternative asset management industry as a driver of economic growth and competitiveness,” said Bryan Corbett, MFA President and CEO. “Ensuring regulations are aligned with international standards, encourage long-term investment, and attract alternative asset managers will cement the UK’s status as a leading financial services hub.”
The letter emphasizes the critical need for favorable tax policies that will encourage long-term capital investment and ensure the UK remains a top choice for alternative asset managers. Tax policies should incentivize investment in the UK and not drive firms to other jurisdictions.
Additionally, MFA strongly opposes applying bank-like macroprudential regulations to alternative asset managers. AIFs do not pose systemic risks to the broader financial system. Applying regulations designed for the banking sector—such as capital buffers and liquidity requirements—would be inappropriate and burdensome. The letter calls for a regulatory approach that reflects the true nature of alternative asset managers, ensuring they are not subject to unnecessary, disproportionate rules that could stifle growth and innovation in the industry.
Read the full letter here.
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About the global alternative asset management industry
The global alternative asset management industry, including hedge funds, credit funds, and crossover funds, has assets under management of £4.5 trillion (Q3 2023). The industry serves thousands of public and private pension funds, charitable endowments, foundations, sovereign governments, and other global institutional investors by providing portfolio diversification and risk-adjusted returns to help meet their funding obligations and return targets.
About MFA
Managed Funds Association (MFA), based in Washington, DC, New York, Brussels, and London, represents the global alternative asset management industry. MFA’s mission is to advance the ability of alternative asset managers to raise capital, invest, and generate returns for their beneficiaries. MFA advocates on behalf of its membership and convenes stakeholders to address global regulatory, operational, and business issues. MFA has more than 180 member fund managers, including traditional hedge funds, credit funds, and crossover funds, that collectively manage over £2.5 trillion across a diverse group of investment strategies. Member firms help pension plans, university endowments, charitable foundations, and other institutional investors to diversify their investments, manage risk, and generate attractive returns over time.
