On August 19, MFA, the Alternative Credit Council (ACC), and the Alternative Investment Management Association (AIMA) submitted a letter to HM Treasury in response to the consultation on the role of Asset Holding Companies (AHC) as part of the broader review of the UK funds regime. All comments were made with respect to the use of AHCs by credit funds.
The Associations believe that the introduction of an AHC regime for private credit managers would be attractive to many private credit managers and the ACC and AIMA supports HMT’s consideration of this matter. The Associations encourage HMT to build an AHC regime based on the following key principles:
- Provide a framework that is designed to preserve tax neutrality for underlying investors in private investment funds;
- Make the UK regime competitive with existing regimes;
- Ensure the regime is and will remain compatible with developing standards from the Organisation for Economic Co-Operation and Development (OECD); and
- Treat the AHC regime as a building block to developing a comprehensive “on-shore” regime for investment funds more generally that provides a flexible framework for the variety of private fund investment strategies that minimizes complexity and promotes tax neutrality for underlying investors.