Funds Hub

Money managers under the microscope

Pensioners totter to the rescue

August 4, 2009

It may look like an unlikely scenario on paper, but Europe’s elderly masses could be about to provide the killer blow to draft EU rules to regulate the alternative investment industry.

Hedge fund associations, private equity lobbyists, the British government and even the United States Treasury have waded into the debate over the proposed legislation, seeking to soften an approach which has been labelled an exercise in post-financial crisis political grandstanding, rather than a measured look at how to better regulate the sector.

Hedge fund crusaders?Now though, the pension funds have entered the stage, and their concerns will be far more likely to win over MEPs across the politcal spectrum.

The giant schemes have pushed more and more retirement money into alternatives as they seek to diversify their portfolios and find the kind of returns that can cushion the effects of pensioners — eventually you and I — living long enough to drain the coffers dry.

They have been stung into action by the possibility that their pursuit of profit to pay future liabilities could be derailed by measures likely to remove non-EU competition from the funds marketplace, while loading punitive additional expenses on the funds that remain. 

Hedge fund body Aima has clearly spotted the opportunity to ride on the coat-tails of a powerful ally and has rushed out estimates that Europe’s pension funds face a 25 billion euro hit. But they might want to cool their enthusiasm:

Pension funds have been constantly pushing for increased transparency from the hedge fund industry as their allocations increased, and are only protesting what they see as misguided regulation, not the concept of regulation itself. Should the retirement schemes succeed in forcing the tipping point which leads to changes to the draft, they will gain a powerful new bargaining tool and could even end up dictating the terms of a new era for a once secretive industry.

(See also: Dale Gabbert: Drive-by shooting misses regulatory target; Are there any positives in the EU’s new hedge fund rules? Watch GLN’s David Malamed; Myners sets his sights on EU directive)

Comments

I just came back from Scotland, and I am so happy to see how my mom who just had a stroke on April of this year at eighty six. Sh survived thanks to the great care at her local hospital ‘the “MONLLANDS” located in Lanarkshire Scotland. The pensioners have it made over there. However I am also against giving the same rites to the Polish Italians and the est born that are coming in in the droves and geting all the can get.My mom and dad worked all there lives in the steelmills and rail-way. Britain stand up for your rites. Love the UK. We in America are fighting for our lives for health care. The rich Rebs/Dems hate it . But we now have a beloved President that will fight for us. Happy birhtday President Obama!!PS: I emigrated here 1965..still love the country…USA.

 

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