Category Archives: Regulation

Anchors aweigh: A way for private investors to play potential Fannie, Freddie IPOs

By Erin Caddell, Anchor Advisors in partnership with GK Strategy

President Donald Trump’s second White House term has sparked discussion that his Administration might return the two U.S. Government Sponsored Enterprises (GSEs) to full public ownership after more than 16 years under federal control following their bailouts in the depths of the 2008 financial crisis. In May, Trump said his Administration is giving “serious consideration” to conducting IPOs for the GSEs. And in late July Bloomberg reported that the Administration was holding meetings with bankers interested in underwriting the IPOs.

Fannie Mae and Freddie Mac’s vital place in the US mortgage system make them compelling assets for investors to look at should the IPOs move forward. Critical to the nation’s economy, the complexities of these entities and the market they serve present challenges necessitating a multi-year transition period to full private ownership. As Fannie and Freddie have swept billions of dollars in profit back to the government in the post-conservatorship era, both companies would need to build up their capital to stand as independent companies. The GSEs’ equity combined represent only 2% of their total assets, far less than traditional banks or mortgage finance firms.

This is where anchor investors could play a role. Anchor investors (we promise we do not like this idea just because we also have Anchor in our name) take meaningful equity stakes in companies preparing to go public, agreeing to hold the positions for a given period post-IPO as a sign of confidence for other investors and to lessen the fundraising need for the company. For instance, in the 2022 IPO of Life Insurance Corp. (LIC), India’s largest insurer, anchor investors including Norges Bank (Norway’s sovereign wealth fund) and the Government of Singapore (GIC) investment fund purchased about 25% of the issue in advance of the IPO. Sometimes anchor investors receive a discount on their shares in exchange for taking down large chunks of the IPO and agreeing to hold their shares though a post-IPO lockup period.

One can imagine the appeal to the government of anchor investors in the GSE IPO process, particularly for the Trump Administration, focused as it is on boosting investment in the US. For that matter, any future presidential administration will be attracted to the idea of contributing hundreds of billions to federal coffers in an attempt to offset multi-trillion-dollar federal budget deficits. Anchor investors could allow the government to generate income from early sales early, as the GSE transition plan and public offerings would likely take several years. A combination of domestic and foreign sovereign wealth funds would be most desirable: the domestic players to emphasize the US’ ability to invest in itself; the global investors to highlight the international attraction to the US capital markets. Expressing interest in the GSE privatizations now would give anchor investors a shot of having a seat at the table if the deals come together.

For investors, a day-one commitment to the GSE IPOs would provide a unique opportunity to invest in scale players in the $14 trillion US mortgage market – about 70% of which is supported in some way by Fannie or Freddie. The GSEs operate as critical components of the US mortgage industry infrastructure, setting standards and ensuring liquidity for residential and multi-family mortgage markets. Such “utility” functions have been rewarded with handsome valuation multiples and stock performance across financial services, energy, technology and other sectors, including those whose protective moats are protected by government regulation. Indeed, in the years leading up to the Global Financial Crisis, Fannie and Freddie performed well in the equity markets, though critics argued their accomplishments were driven by overly aggressive balance-sheet practices and lobbying activities.

Risks abound when investing in entities with multi-trillion-dollar balance sheets, as the wipeout of billions of dollars in the GSE’s market caps demonstrated in 2008. Numerous issues must be worked out to return the GSEs to private hands, most notably the current federal backstop on Fannie and Freddie’s combined $7 trillion-plus in debt, the lion’s share of which is backed by the mortgages the two entities guarantee. Even a modest increase in borrowing rates on such a large debt load could result in a big hit to the GSE’s earnings post-IPO, necessitating a long period in which the federal backstop is withdrawn over time.

But these are risks that large, sophisticated investors are well-equipped to navigate. A once-in-a- chance to invest in unique, highly profitable and protected franchises critical to the US economy, and to build goodwill with a President attracted to out-of-the-box deals, make the GSE privatizations an opportunity worth considering.

GK Strategy Formally Expands Political Advisory Services to United States

GK has agreed a formal strategic partnership with Washington DC based Anchor Advisors to provide integrated insights for private equity investors navigating transatlantic M&A transactions.

GK Strategy is delighted to announce its formal expansion to the United States, to support its private-asset investor clients navigate and engage with policymaking at a federal and state level.

The partnership brings together GK Strategy’s deep expertise in the UK’s policy and regulatory environment with Anchor Advisors’ experience of supporting private equity investors navigate US policy at a state and federal level. The two firms will support private equity and private credit clients and their portfolio companies by providing robust insight to better anticipate regulatory change, assess political risk, and identify opportunities in both markets.

Louise Allen, CEO of GK Strategy said: “We’re delighted to announce the formal partnership between GK Strategy and Anchor Advisors. Private-asset investments are increasingly being shaped by fast-moving policy developments which have the potential to have significant impacts on the commercial environments for businesses operating in both the UK and the US.

Private equity and private credit firms, and the companies they own, are also increasingly looking beyond their traditional geographies to identify compelling investment opportunities, and to limit their exposure to any single region. GK’s partnership with Anchor Advisors means we can offer our clients a clear, connected perspective on how regulatory shifts in London and Washington could impact valuations, deal structures, and long-term strategies.”

Erin Caddell, President of Anchor Advisors, added: “Investors want certainty and foresight. Our partnership allows us to deliver precisely that, by providing clients with comprehensive analysis that spans both sides of the Atlantic, from opportunities presented by US federal and state government action to sector-specific funding trends.”

The partnership reflects a growing demand from private equity and private credit investors for tailored political and regulatory intelligence. By combining local insight with international perspective, GK Strategy and Anchor Advisors will support investors not only to mitigate risk but also to identify new growth opportunities in an increasingly complex global policy environment.

The new international advisory service will be led by Lizzie Wills, Senior Partner and Head of Private Equity at GK Strategy, and President of Anchor Advisors Erin Caddell.

For more information about GK’s US coverage, or to arrange an introductory meeting with the GK team in Washington D.C, please be in touch with Lizzie Wills on lizzie.wills@gkstrategy.com or 07456 794 568.

How can agri-tech prepare for the next parliamentary term?

MPs might be on their summer break but what can you be doing to prepare for the next parliamentary term?

August in Westminster is a quieter time. Government grinds to a halt as MPs return home to continue business back in their elected constituencies. This downtime in the political calendar grants companies a rare breathing space – and the opportunity to turn attentions to resetting government relations plans and preparing for the parliamentary year ahead.

Before parliament returns on 1 September, businesses should be taking the time to think about how to best prepare for the government’s second year in office. Although parliament is in recess, there’s still plenty we can be getting on with to develop an effective strategy and work towards policy objectives. From strengthening stakeholder engagement strategies to assessing regulatory risk, the planning taken now will make the crucial difference between scrambling to adapt to policy announcements and confidently navigating the next wave of policy decisions.

So, what should businesses be thinking about during these summer months?

Engaging with the civil service

While parliament draws to a close over the summer, the civil service remains central to ensuring the smooth operation of public services. Officials continue to work on the implementation of government policies, running consultations, and preparing for the legislative activity that is set to resume in the autumn.

For businesses, the absence of parliamentary activity offers a valuable opportunity to take stock of their existing relationships with civil servants, assess the strength of those channels of communication and identify where they could be expanded. Civil servants tend to be a bit quieter over summer too, so it’s the perfect time to catch up over a coffee in preparation for the year ahead.

Monitoring Parliamentary Committees

Similarly to the civil service, parliamentary committees continue their business while MPs are away. Staff continue to work behind the scenes, launching calls for evidence and meeting businesses in their sectors of interest. In recent weeks, we’ve seen a flurry of committee activity affecting the agri-tech space.

The Science, Innovation and Technology Committee have launched an inquiry into innovation and global food security, actively seeking to hear from agri-tech businesses about how new agricultural practices can catalyse food production. Each Committee’s reports, which are written using the evidence submitted to the inquiry, land directly on ministers’ desks – offering businesses the space to communicate exactly what they need from government to succeed.

Can we also add the health one here? One of the focuses of the health one is healthy food and many of the agri-tech businesses focus on improving nutritional content e.g. precision breeding.

Preparing for Party Conferences

The annual party conferences mark a significant moment in the political calendar. Taking place over September and October, each conference allows parties to set their political agenda and rally support from members and industry. For Labour as the governing party, this means actively listening to and engaging with businesses of all sizes to better understand their priorities, concerns, and capacity to contribute to the party’s core objective of economic growth. With agri-tech flagged as a frontier industry within the government’s industrial strategy, the party conference will provide a useful avenue for businesses within the sector to raise their profile with government.

For opposition parties, conferences are a critical space for developing and refining alternative policies that can challenge the government’s agenda. Without the responsibility of running departments day-to-day, opposition parties can use this time to strategise ideas that could credibly form the backbone of their next election manifesto.

Meeting with MPs

Although MPs are back in their constituencies during recess, they are not on officially out of office. During this time MPs turn their attentions to local priorities, such as meeting constituents, visiting community projects and engaging with businesses in their area. Businesses, and especially those developing cutting edge agricultural technology, should think about inviting MPs to visit their sites to see first-hand innovation in the sector. Demonstrating tangible contributions to local employment, food security, environmental sustainability, or economic growth can help MPs see how your business aligns with their constituents’ interests and supports the government’s wider priorities.

Building and strengthening relations with MPs is at the core of effective political engagement. An MP who understands your business and believes in its potential can be a powerful advocate by championing your work in parliament or connecting you with relevant ministers and officials.

Although the political pace of the parliamentary summer recess might feel slower, this is no time for businesses to wind down. Whether through strengthening relationships with civil servants, preparing for the party conference season, or engaging directly with MPs in their constituencies, the weeks remaining weeks until 1 September grant businesses the time to reassess their political engagement. Using this time productively will enable businesses to position themselves as constructive partners to government, trusted to feed into the conversations that will shape Labour’s next year in office and beyond.

Trump Administration deregulatory push yields industry wish list for rule rollbacks

By Erin Caddell, Anchor Advisors LLC – A GK Strategy partner firm

Amidst the mile-a-minute pace of activity in the Trump Administration’s first six months, the Office of Management and Budget (OMB)’s April 11th posting of Federal Register document 2025-06316, “Request for Information: Deregulation” did not exactly make for scintillating tabloid reading. Yet the effort initiated by OMB’s memo is likely to spark substantial regulatory activity by a number of federal agencies starting this fall and into the remainder of Trump’s current term that will be highly impactful across a range of industries in the U.S.

OMB’s request for information (RFI) was prepared in response to an Executive Order signed by President Trump on April 9th to repeal “[u]nlawful, unnecessary and onerous regulations”. The order notes that the U.S. Supreme Court has issued a number of rulings in recent years limiting the power of federal agencies, and asks commenters to identify regulations now inconsistent with these decisions.

Companies and their trade associations were only too happy to respond to OMB’s request. The RFI received nearly 8,500 comments during the 30-day window (though some were from individuals calling for caution against moving too quickly to deregulate). OMB and federal agencies will likely begin the process of repealing or amending certain rules cited in the comments starting this fall. Importantly, the executive order notes that agencies may attempt to rescind the rules in question without the traditional notice-and-comment period required for formal rulemaking, which can add months if not years to the process. The order cites a provision in the Administrative Procedures Act (APA) providing a “good cause” exemption to traditional rulemaking requirements if the original rule is “impracticable, unnecessary or contrary to the public interest.” Any attempts to circumvent the rulemaking process would be met immediately by legal challenges (interestingly, the Mortgage Bankers Association, an influential trade association, argued that agencies should continue to utilize the notice-and-comment process, as abandoning this function could rob industry with a key means of providing input). But even if ultimately overturned, companies would have to make accommodations to assume a proposed repeal could become effective, particularly if intermediate courts support the Administration.

So what does Corporate America hope to deregulate? Anchor reviewed a representative sample of comment letters submitted by trade associations representing a range of industries. We summarize in the table below recommendations from six of these comments. Taken together, the missives describe their authors’ frustrations with the blizzard of rulemaking under the Biden Administration and cite hundreds of regulations they believe should be repealed or revised in the name of spurring economic growth and reducing the administrative burden.

Select Industry Association Responses to OMB Deregulation Request for Input (RFI)

Organization Rule cited Agency(s) Year Commenter’s rationale
Mortgage Bankers Association (MBA) Adoption of energy efficiency standards for new construction of HUD- and USDA-financed housing HUD, USDA 2024 Will drive up costs for new single-family and multi-family construction; 30 states still operating under prior standard enacted in 2009; shortage of inspectors trained on new standard.
National Multifamily Housing Council/National Apartment Association Floodplain management and protection of wetlands HUD 2024 Imposes substantial compliance costs on homeowners without robust data on actual risk reduction benefits nationwide.
Information Technology and Innovation Foundation Rule requiring minimum of two crew members on most US freight and passenger train journeys. Federal Railroad Administration 2024 Lacks foundation in safety data; is driven by labor-union pressures; automated braking systems and other technological advances intended to mitigate accidents caused by human error.
American Petroleum Institute (API) National Ambient Air Quality Standards (NAAQS) for Particulate Matter EPA 2024 In 2024, EPA mandated a lowering of maximum air particulate matter – a measure of air quality – of no more than 9.0 micrograms per cubic meter vs. 12.0 previously. API argues no new scientific evidence had emerged to warrant such a reduction. API argues the new standard will limit economic growth. The group supports revising, not repealing the rule.
Small Business Low Risk Coalition (group of manufacturing/industrial trade associations) Multi-sector general permit rules for stormwater discharge from industrial facilities EPA 2021 Argues 2021 version of standard was issued in overly hasty fashion relative to the 2015 version, which received lengthy multiagency review. The group argues that the 2021 permit rules added costly, unnecessary analytical monitoring requirements for many industries.
American Hospital Association (AHA) Remove telehealth originating and geographic site restrictions within the Medicare program. CMS Various Currently, Medicare patients in urban or suburban areas do not have the same access to telehealth services covered by Medicare as those in rural areas; in other cases patients must be in a clinical setting to receive telehealth services, which defeats their purpose.

Source: Regulations.gov

What does this mean for investors and companies? The OMB request for information and its many industry responses are a sign that deregulation – obscured thus far by the trade war, the immigration crackdown and the many controversies that follow the current Administration – will nonetheless be a key theme for Trump’s second term. The fall Unified Regulatory Agenda, a document published by presidential Administrations twice a year that details each federal agency’s priorities for the coming 12 months, will provide clues as to how the Administration has translated OMB’s fact-finding mission into agency priorities.

Given the inclination of Trump, Vought and those around them in the Administration, OMB is likely to push ahead with many of the deregulatory recommendations put forth in the comment letters. Opponents will attempt to counter these efforts through the courts, with their allies in Congress, and by attempting to influence public opinion. But as with many other aspects of the Trump Administration, critics will face the challenge of fighting many battles at once.

History also shows that deregulation can be a double-edged sword for the private sector. The Global Financial Crisis of 2007-08, which followed a long period of loosened of the U.S. financial services industry, is the most striking recent example. But more recent cases like the collapse of Silicon Valley Bank in spring 2023 demonstrate the dangers of lighter-touch regulation. In that case, rule changes reducing capital and liquidity requirements for banks of Silicon Valley’s size encouraged the firm to increase its risk profile, making the firm highly vulnerable to a rise in short-term interest rates. Companies must do more on their own to protect their businesses, customers and employees at times when the pendulum swings toward deregulation. Ethics committees, ombudsmen and similar compliance measures (Anchor and its partners can help with this!) can serve companies well at times like this when animal spirits are running high – on Wall Street as well as in Washington, D.C.