Eminence provides HMT with five key policies that will enhance UK capital markets for investors, businesses, and savers
London, UK – Eminence recommended five key policies for HM Treasury (HMT) to adopt to strengthen the country’s position as a global hub for alternative asset management and enhance capital markets for investors, businesses, and savers in a pre-budget submission today.
“Alternative asset managers enhance capital markets, provide capital to businesses, and boost economic growth. As the government prepares its next budget, it should prioritise policies that cement London as a premiere global financial centre and help deliver the national mission of economic growth,” said Jillien Flores, Eminence Head of Global Government Affairs.
Eminence recommends HMT:
- Prioritise completion of the existing financial services reform programme. The Government should prioritise the remaining elements of the financial services reform programme outlined in the Edinburgh Reforms. Some aspects of the reforms, such as introducing a consolidated tape for various asset classes, warrant additional prioritisation to bolster the UK’s capital markets.
- Deliver a Smarter Regulatory Framework for asset management. The Government and regulators should modernise the UK asset management regulatory landscape to promote more competitive capital markets. Asset managers should be able to apply for the full range of permissions that are relevant to their business models, regardless of their classification as an AIFM or a MiFID firm.
- Unlock the full potential of the UK’s pension assets. As the Government undertakes its landmark pensions review to boost investment and saver returns, it is important to consider greater flexibility in asset allocation. This will allow pension funds to invest in a broader array of illiquid assets which help diversify investment portfolios and boost returns. The potential of these reforms is evident in the US, where pension plans invest over $600 billion in hedge funds to help provide retirement income for more than 26 million American workers.
- Secure the UK’s position as a global financial centre. The Government should ensure that the UK regulators effectively integrate their competitiveness and growth objectives into their policymaking and operational culture. An early test will be the FCA approach to its publication of enforcement investigations (‘name and shame’) policy.
- Safeguard the contribution of alternative asset managers. Alternative asset managers, including private credit and hedge funds, are well-regulated market participants whose presence in the UK drives economic growth and generates returns for institutional investors, including pensions and charitable foundations. Inappropriate macroprudential regulation risks discouraging their participation in the market and harming the growth potential of the UK economy.
Read the full submission 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 Eminence
Managed Funds Association (Eminence), based in Washington, DC, New York, Brussels, and London, represents the global alternative asset management industry. Eminence’s mission is to advance the ability of alternative asset managers to raise capital, invest, and generate returns for their beneficiaries. Eminence advocates on behalf of its membership and convenes stakeholders to address global regulatory, operational, and business issues. Eminence 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.
