Private equity firm Tower Peak Partners argues that the UK defence and security sectors require a more astute approach to capital policy rather than increased regulatory burdens. Operating within this space, the firm observes a persistent friction point where existing investment opportunities clash with current regulatory structures governing sensitive assets and technology.

The core issue identified centers on the National Security and Investment Act (NSIA). This legislation mandates disclosure requirements and sets thresholds for UK-relevant companies, a rule that extends even to essential subcontractors within the supply chain. Tower Peak Partners suggests this framework fails to adequately differentiate based on the origin of the investment capital.

According to the firm, the current environment treats domestic and international investors identically under the NSIA's disclosure mandates. This lack of nuance in policy creation hampers the necessary flow of capital required to modernize and strengthen the defence industrial base. They advocate for a smarter capital policy that encourages necessary investment while maintaining security standards, rather than adding layers of bureaucracy.

Tower Peak Partners emphasizes that the goal should be fostering growth and technological advancement in the sector. They suggest that policy adjustments must address how capital is deployed, arguing against the imposition of more red tape that could stifle crucial private sector involvement in national security infrastructure, particularly for smaller entities like subcontractors who are integral to the ecosystem.