Money managers under the microscope
After last year’s record poor performance, investors may view a warning that the quality of hedge funds could get worse with a certain degree of irony.
However, according to the Hedge Fund Standards Board’s chairman Antonio Borges, this is one of the negative effects on the industry that proposed EU laws could have.
What he calls the ‘protectionist element’ of the draft — whereby the EU market could be shut to fund managers from outside unless their host countries adopt similar rules — could mean large hedge funds in London gain a comfortable market position without having to face up to competition from the huge U.S. hedge fund industry.
“It’s not going to kill the industry, because the industry will survive,” Borges told a briefing at Axa Investment Managers this week.
“But there will not be competition from U.S. managers. The quality of the industry will deteriorate quite markedly.”