The hedge fund and alternative investment sectors now have a vital role to play in boosting UK growth and innovation as the country recovers from the economic impact from Covid-19 and readjusts to life outside the EU, the Alternative Investment Management Association and Alternative Credit Council have said.
AIMA, the global hedge fund industry trade body, and its private credit affiliate the ACC, have published a new policy paper setting out how, in practical terms, the industry can support the UK government’s goals in increasing economic growth, boosting productivity and levelling up across the UK.
The policy objectives, which cover regulation, tax, pensions and real economy financing, are aimed at freeing up capital and creating new jobs, AIMA said.
The industry trade group believes that maintaining the UK’s attractiveness for investment managers and their investors in a post-Brexit and Covid-19 landscape would support the UK’s economic prosperity.
AIMA CEO Jack Inglis (pictured) said: “Our UK members look after the money of investors from around the world, protecting and growing the capital that is entrusted to them. As the UK eyes its future outside the EU, the government must be ambitious in cultivating this industry in a way that benefits the whole country, while also reaffirming the UK’s credentials as compelling jurisdiction for asset management firms to do business.”
Specifically, the AIMA/ACC policy framework calls for the support and development of new forms of non-bank lending, which would boost funding for small-to-medium enterprises (SMEs) and mid-market firms post-Covid, along with the creation of a new Long-Term Asset Fund (LTAF) aimed at investing in illiquid assets, such as infrastructure and private companies.
At the same time, the paper sets out plans for flexible and tax-neutral professional investor fund vehicles, to help the UK position itself as a ‘one-stop shop’ for professional investor fund management.
AIMA and the ACC are also calling for an overhaul of defined contribution pension scheme rules to allow them to access alternative investments to strengthen retirement income. It also sets out a far-reaching rethink of how UK-managed funds are regulated, and suggests the removal of certain elements of tax law to make the UK a more attractive jurisdiction for investment managers to set up and expand.
“As well as providing direct employment and tax receipts, the alternative investment management industry offers investors superior risk-adjusted returns, allows investors to diversify their portfolios and contributes to the efficient functioning of capital markets,” the paper noted.
