Funds Hub

Executives in London’s Mayfair, home of the UK’s multi-billion dollar hedge fund community, could be forgiven for a few raised eyebrows after British Prime Minister Gordon Brown’s call yesterday to outlaw shadow banking systems and offshore tax havens.

“You are also restructuring your banks. So are we.” he told U.S. Congress. ”But how much safer would everybody’s savings be if the whole world came together to outlaw shadown banking systems and offshore tax havens.”

The terms are vague, but could be taken as a possible hint towards the lightly-regulated world of hedge funds.

The timing is hardly welcome for the hedge fund industry, coming as it does after recent calls by European leaders for more regulation of hedge funds, and ahead of concrete proposals from the European Commission next month.

However, hedge fund executives appear relaxed.

While pressure for tighter rules remains, executives believe that, whatever the comments mean, they don’t signal a major break with the UK FSA’s oversight of hedge funds — a framework viewed as relatively successful in monitoring this freewheeling industry so far.