Candidate, and now president, Trump has been consistent in giving strong verbal support to popular concerns that open markets are bad for our societies. European populists are also gaining traction articulating these ideas. “Protectionism, with developments such as Brexit [is] creating a growing risk of barriers, however harmful this may be for citizens and investors,” noted the Alfi communiqué issued to coincide with the 19-20 September Global Distribution Conference.
Christian sees this appointment as a bold step which could have positive benefits for fund managers seeking to attract investors. In particular, he expects to see changes to the wide ranging Dodd-Frank regulations, many of which he believes have hampered the industry. “These 2,500 pages of legislation will not be left intact under Jay Clayton,” he said during the Alfi conference.
So whilst recognising the difficulties of the protectionism inherent in the president’s stance on immigration and trade, Christian saw positive signs elseshere. “The previous administration was more focused on enforcement, but now we should see less of this and more rule making to encourage the raising of capital.” Also, despite some of the anti-foreigner content of Trump’s rhetoric, Christian thinks it should become easier for European asset managers to access the US market, with its tempting $44trn assets under management in funds.
He foresees changes to licensing rules which should make it easier for non-American funds to set up shop. Also, legislation know as the “Choice Bill” is currently before the US congress, and this could shake up crowd-funding. Also, rules could be loosened on marketing to institutional high net wort investors.
Not that this will be easy. The US market is both the biggest, but also the most mature market in the world. Indeed Christian described the situation as “saturated” meaning European firms hoping to crack the North American market will need to be heavily committed, and equipped with a unique, attractive offering.
According to Christian, the message is: “America is still open for business for capital raising, and it will be made easier for European fund managers to raise capital in the US.” It remains to be seen, however, whether the anti-free-trade rhetoric Donald Trump articulates will harden into a tough protectionist stance.