BVCA Technical Policy Conference 2025: Navigating Change in UK Private Capital

Last week, the BVCA Technical Policy Conference in London brought together industry leaders, policymakers, and fund professionals at a pivotal moment for UK private capital. The discussions underscored a sector navigating a complex mix of economic, political, and regulatory pressures, with the Autumn Budget being announced yesterday adding timely context to ongoing debates.

Belasko’s Nick McHardy, Head of Funds, and Dom Rice, Senior Manager in Guernsey, highlight the key takeaways and trends shaping the industry.

Economic and political landscape: mixed signals and emerging challenges

Conference speakers highlighted a UK economy of contrasts. GDP growth shows signs of resilience, but productivity remains low and the labour market is under pressure. Consumer behaviour is also diverging: older households are saving more, while younger groups are showing greater confidence in spending.

The political backdrop also drew attention. Public dissatisfaction remains high, and polls suggest less than 40% of voters support the two major parties, prompting speculation about a potential shift toward multi-party coalitions. This environment, coupled with the Budget’s “smorgasbord” approach to tax changes, reflects both opportunity and risk for private capital: growth and deregulation may be supported, but increased complexity and political debate are inevitable.

A shifting regulatory landscape: From AIFMD to misconduct oversight

The UK is pressing forward with reforms to the AIFMD regime but is not mirroring EU updates from AIFMD 2. Instead, it aims to strip back requirements viewed as burdensome and disproportionate, with discussions around introducing a new exempt category for firms with up to £250 million under management.

The emerging PISCES (Private Intermittent Securities and Capital Exchange System) regime also reflects this trend toward flexibility and competitiveness, giving an alternative route to trading private capital shares in order to improve market liquidity.

At the same time, regulatory leniency on conduct is firmly off the table. We can expect tougher rules for both financial and non-financial misconduct, and a continuation of focus and stricter supervision of Appointed Representatives.

The message is clear: growth and innovation is being pursued but there is debate over the practical impact due to wider implementation and oversight focus considerations.

Legal and governance developments: complexity and opportunity

The NSIA (National Security and Investment Act) regime continues to generate debate and particularly over a lack of process transparency to date. Despite expectations of simplification, filings are expected to increase and an increasing number of deals are being caught by the regime, with wider scope for review.

The BVCA Accounting, Reporting & Governance Committee echoed this sentiment, stressing that rigorous governance enhances valuation quality, operational transparency, and fund credibility, particularly important in a climate of rising scrutiny and evolving investor expectations.

Tax and Carried Interest: planning under a change regime

The conference highlighted ongoing tax pressures in the UK, which have intensified over the past decade. Key takeaways:

• Private equity and fund professionals face a higher overall tax burden relative to other jurisdictions.
• Carried interest reforms remain a significant focus. With the new regime requiring a 40-month average holding period to qualify for beneficial treatment, the effective tax rate for qualifying carry will rise to around 34%.
• Residency and permanent establishment rules have been clarified, increasing certainty for fund managers operating across jurisdictions.

Bank of England: stress testing private capital

The Bank of England signalled its intention to stress test private capital, particularly UK corporates, private equity, and leveraged buyouts. This reflects both the growing systemic importance of private markets and the recognition that the nature of a potential financial shock is like to be different than previous shocks experienced in today’s environment.

For managers, this means engagement with regulators will likely continue to increase, and robust stress-testing frameworks within funds will be an increasingly important feature of operational and governance best practice.

Looking ahead: navigating complexity with confidence

The discussions at the BVCA Technical Policy Conference made it clear that UK private capital is entering a period of heightened complexity, but also of opportunity. Firms are being called on to combine agility with discipline, balancing the need to respond quickly to regulatory and fiscal changes while maintaining robust governance and operational standards.

Good governance, strong valuation practices, and transparent reporting are no longer just compliance obligations, they are central to building trust with investors and ensuring sustainable value creation. At the same time, strategic planning around tax, carried interest, and cross-border operations will be increasingly critical as the UK fiscal landscape evolves.

Technology, particularly AI, is set to play a transformative role, accelerating processes and enhancing decision-making, but it cannot replace the professional judgment that underpins high-quality fund management.

Ultimately, private capital professionals who embrace these challenges with foresight, rigorous planning, and a focus on governance will be best positioned to navigate uncertainty, seize opportunities, and deliver enduring results for their investors.

If you’d like to discuss any of these notable industry trends and themes, please get in touch with Nick ([email protected]) or Dom ([email protected]).