21/05/2010
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.
Increase text sizeWho’d be a hedge fund operational professional? In the good times they are anonymous; hidden by the shadows of over-achieving portfolio managers. In bad times they are often the last bastion between survival and destruction.
"It’s all too easy to attack ‘speculation’ because it is almost impossible to differentiate between speculation and trading in general"
With the UK trying to tame a record deficit, it would be a reckless Treasury that let tax pounds slip through its fingers. Yet this may well be the unintended consequence if current FSA proposals for bonus restrictions are applied to hedge funds.
We are all joined by an invisible economic thread; a skein that belies theories of financial decoupling. Yet, there is still room for nuance. Credit Suisse’s latest research reveals that global investors are not all opting for the same strategies. Currently, US investors have left their European and Asian peers behind, showing a high level of interest in emerging market strategies. And while equities continue to be universally popular, trading strategies top the list in Europe, while US investors are opting for market neutral, as they hope to side-step the fast-moving markets.
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