The Managed Funds Association (MFA), a leading US lobbying group for hedge funds and private credit firms, has urged President-elect Donald Trump’s transition team to revisit what it calls "harmful" regulations imposed on private funds and to preserve "pro-growth tax policies", according to a report by Reuters.

The report cites a letter seen by Reuters as reflecting anticipation in the private funds industry of a registry shift under the incoming Republican administration.

In the letter, the MFA, which has actively opposed the Biden administration's financial policies, including suing the Securities and Exchange Commission (SEC) over new private fund rules, asked for an overhaul of the agency’s agenda.

“Now is the time to turn the page on the current SEC agenda and leave behind misguided policies that have harmed markets, investors, and the economy,” wrote MFA President and CEO Bryan Corbett.

Wall Street lobby groups are preparing for policy changes under Trump’s administration, which has pledged to cut taxes and ease regulations. In its letter, the MFA specifically criticised SEC reforms aimed at increasing transparency and reducing systemic risks, calling instead for recognition of private funds as stabilisers of financial markets.

"The diversification provided by private funds is a key fixture in stabilising financial markets and diffusing risk," Corbett noted.

A SEC spokesperson defended the agency’s recent reforms, asserting that they enhance transparency and strengthen the resiliency of private funds.

The letter also emphasised the importance of preserving tax provisions that encourage long-term investments, particularly the current treatment of carried interest as a long-term capital gain. With Republicans set to control Congress, tax reforms are expected to be a central focus in the coming year.

Biden administration regulators, led by the Treasury, have scrutinised systemic risks posed by non-bank entities, including private funds. However, the MFA argues that alternative assets are essential for driving economic growth and innovation.