HM Treasury has revealed plans to support Asset Management Centres of Excellence in UK universities, in association with the Investment Association.
The plan, which sets out to address the "current skills shortage" and create a "pipeline of talent" into the asset management industry, was announced in the Treasury's report Investment Management Strategy II, published this morning.
The document highlighted six key areas of growth for the sector that it would be supporting, including promoting the UK's competitiveness and "ensuring global regulatory coherence".
The six areas of growth laid out in the strategy include:
• Strengthening the UK's investment management talent pipeline, by supporting the industry to establish Asset Management Centres of Excellence at UK universities across the country
• Making the most of the UK's world-leading status in fintech to develop innovative solutions such as a blockchain enabled digital fund
• Working with international partners abroad to attract overseas firms to locate in the UK and promote UK firms overseas
• Promoting the UK's competitive and stable tax and regulatory environment to facilitate innovation and growth within the industry, and consider in Spring 2018 whether to consult on making changes to the short-term business visitors rules
• Enhancing government, regulator, and industry dialogue through the newly established Asset Management Taskforce; and
• Providing the support that UK asset managers need to be global leaders in developing innovative investment strategies - such as green finance and social impact investing - to meet the changing investor demands.
In particular, the new Centres of Excellence will "form the backbone of the UK's world-leading asset management capabilities and professionalism where qualifications would be universally recognised as a global standard".
The report said: "As well as developing entry level skills, the Centres will also serve as research centres and facilitate continued professional development of the asset management industry workforce."
The government previously announced plans to publish a new long-term strategy on how it will ensure the UK's asset management industry will "continue to thrive" in the Autumn Budget.
Commenting on the Treasury's plans unveiled this morning, the Economic Secretary to the Treasury Stephen Barclay said: "The UK is a world leader in asset management, and it is vital that we keep it that way. The new strategy for the sector outlines how we will do this, and I look forward to working closely with the industry to fully realise its potential."
HM Treasury also highlighted its commitment to ensuring the UK asset management industry continues to have a "significant global reach", with plans to enhance this with Mutual Recognition of Funds (MRF) with overseas jurisdictions.
The report said: "These arrangements could, in principle, allow UK funds to benefit from a streamlined recognition process when seeking to access overseas investors, and overseas funds would benefit from a similarly streamlined regulatory approach within the existing regulatory framework when seeking to access UK investors.
"Through this, the government intends to increase the global reach of UK funds and provide UK consumers with access to diverse product offerings."
The government will also explore the possibility of MRF agreements with target market jurisdictions, seeking to deliver "tangible benefits to the UK".
The report also said there was an "enormous commercial opportunity" for the UK asset management sector in green finance, especially in the potential to tap into the markets of emerging economies.
In September 2017, it set up the Green Finance Taskforce, which will issue policy recommendations on how to consolidate the UK's international position and scale up domestic green finance.
"This Taskforce's institutional investment work stream is considering how the government might facilitate sustainable financial decision-making of asset managers and owners, and support the industry as green finance grows globally."
However, the report said the asset management industry needs to focus on diversity within its staff as "organisations that embrace diverse workforces deliver better results".
The report said for the asset management industry, "diversity of perspectives is especially important to effectively engage with clients and to make the right investment decisions".
It also highlighted recent research which found hedge funds managed by women outperform those managed by men but fewer than one in 20 alternative asset managers employ a female portfolio manager.
"Organisations, including asset management firms, must do more to take full advantage of the opportunity that diverse workforces represent," it said.
Also announced in the report was the Investment Association's plans to embark on the world's first ever Asset Management Cyber Secutiry Strategy, which includes the development of a threat intelligence network.
The government said it "strongly supports" this work, which is hoped to provide a "new level of protection for asset management and fintech firms".
Short visit tax regime
The government also announced it is looking into the tax regime surrounding employees who work in a foreign branch of a UK-based firm but make short business visits to the UK.
Currently, these are taxed on their earnings for the time spent working in the UK while firms employed by foreign subsidiaries making similar short vists are exempt.
The report said the government "understands industry views on the burden these rules create" and will consider the issues raised. In Spring, the government will decide whether to consult on making changes to this particular tax regime.
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