By Carolina Mandl
NEW YORK (Reuters) - The Managed Funds Association, an alternative asset management trade group, announced on Wednesday its new board of directors, as well as its chair Jody Gunderson, managing principal at $16 billion credit investment firm AB CarVal, as the industry prepares for the threat of higher taxes and new regulation.
The new team comes as the advocacy group representing $3.2 trillion in assets managed by hedge funds and private credit and equity firms prepares for potential changes in federal agencies, including the Securities and Exchange Commission, as the U.S. will elect a new president in November, and for discussions around a tax bill that expires in 2025.
New administrations usually replace policymakers and regulators, such as the chair of the SEC.
MFA scored a big win for the alternative asset industry this year on the regulatory front, as a U.S. appeals court in June overturned a major SEC rule imposing stricter oversight of private funds, in a fresh blow for chair Gary Gensler's ambitious agenda to boost transparency and stamp out conflicts of interest on Wall Street.
It was the first time MFA sued a regulator. Besides the private funds rule, the group has sued the regulator over a rule requiring firms that routinely deal in government bonds to register as broker-dealers and another rule aimed at boosting transparency of short-selling. Both cases are still pending decision.
Gunderson, who is replacing current MFA Chair Natalie Birrell, president of Anchorage Capital Group, said the industry group is "trying to game plan for the different scenarios that it will face" and how to "advance the industry's agenda."
MFA has yet to deal with upcoming proposals and discussions, such as a cybersecurity rule, which would require advisers and funds to adopt and implement written cybersecurity policies as well as address its risks, and the outsourcing rule, which would ban advisers from outsourcing certain investment services.
The alternative asset industry opposes both proposals.
"As we look ahead to 2025, we're obviously going to be navigating a presidential election and a new Congress, and that will certainly have an impact on our advocacy tactics," said Bryan Corbett, MFA's chief executive officer, adding that a tax increase on carried-interest income will be among the main topics.
Carried interest refers to a longstanding Wall Street tax break that let many private fund financiers pay the lower capital gains tax rate on much of their income. The tax debate next year could involve changes in the carried interest to pay for other tax provisions.
On the regulatory front in Europe, where MFA opened offices in London and Brussels in 2024 and 2022, respectively, Corbett said efforts will be mainly concentrated on advocating private funds should not be regulated as banks. (This story has been corrected to change the spelling of Bryan Corbett's name in paragraph 9)