MFA President and CEO Bryan Corbett issued the following statement emphasizing the important role of leverage for investors, markets, and the economy:
“Leverage, in and of itself, does not present financial stability risk. In fact, it often serves as an important stabilizer of markets by allowing greater risk-offsetting and providing important liquidity.
Before rushing into rulemaking, policymakers should first ensure they have accurate data and objectively analyze it to better understand how leverage is being used, and how it improves market liquidity, pricing, and volatility. It is also important to factor in the extensive risk management market participants and counterparties deploy.
Promulgating overly broad, knee-jerk limits on leverage will have far-reaching consequences, including raising the cost of government borrowing, undermining business access to capital, and reducing the number of market participants.”
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About the Global Alternative Asset Management Industry
The global alternative asset management industry, including hedge funds, credit funds, and crossover funds, has assets under management of $4 trillion (Q4 2022). The industry serves thousands of public and private pension funds, charitable endowments, foundations, sovereign governments, and other global institutional investors by providing portfolio diversification and risk-adjusted returns to help meet their funding obligations and return targets.
About Managed Funds Association
Managed Funds Association (MFA), based in Washington, DC, New York, Brussels, and London, represents the global alternative asset management industry. MFA’s mission is to advance the ability of alternative asset managers to raise capital, invest, and generate returns for their beneficiaries. MFA advocates on behalf of its membership and convenes stakeholders to address global regulatory, operational, and business issues. MFA has more than 170 member firms, including traditional hedge funds, credit funds, and crossover funds, that collectively manage nearly $2.2 trillion across a diverse group of investment strategies. Member firms help pension plans, university endowments, charitable foundations, and other institutional investors to diversify their investments, manage risk, and generate attractive returns over time.
