Does loyalty lie with the lawyer or the law firm?
Big changes were afoot in the London hedge fund legal scene last week, after New York-based Akim Gump swooped on Simmons & Simmons
21/05/2010
Directive threatens growth of EU hedge funds, reports finds
The total number of European hedge funds is set to approach its previous 2007 high within three years, yet average assets under management are likely to decrease as the industry struggle to meet
the challenges presented by the EU AIFM Directive, according to a recent study by Boston-based financial research and consulting firm Celent.
According to the report, entitled ‘Hedge Funds in Europe: Riders of the Storm' , while hedge funds are becoming increasingly efficient in areas such as risk management, the higher operational costs expected to arise as a consequence implementation of the Directive is expected to result in a mass exodus of funds out of the EU.
Of the non-EU firms surveyed, 10% of those with an office in the EU stated that they would cease to do business in Europe due to the proposed regulation, while 30% of those who do not have a European office would decide against opening one.
Overall, the study estimates that around 50bn in assets under management would subsequently leave the region as a result of the Directive.
“The European hedge fund industry is in a better position now than it was a year back, and in this scenario, the new EU Directive might have adverse effect on European business, thereby jeopardising its recovery,” says Anshuman Jaswal, senior analyst and author of the report.
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Editor's view: 8 February 2012
Speculative moves, a perceived landgrab and a potential bidding war in the hedge fund sector have all opened up in recent weeks
Comment: Julian Korek
"Advisers need to be analysing key considerations and determining where they fall in the spectrum of SEC registration; no easy task given the scope of the legislation"
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