Money managers under the microscope
The debate over the EU hedge fund directive at this week’s Edhec-Risk conference in London was in danger of becoming all a bit too friendly before one delegate’s intervention.
“Isn’t it the case that you’re all being terribly polite?” she asked, drawing widespread applause from the hedge fund industry audience with the suggestion that most of the panel secretly believed the controversial regulation may be driven a rather sinister rivalry between EU member countries.
The EC’s representative on the panel was forced to defend his position.
“I have no idea of member (states’) intentions,” he said. “(But) I don’t consider myself to be part of a Franco-German plot.”
Whatever the motivations behind the regulation and whatever political manoeuvring is going on behind the scenes, the UK’s FSA highlighted that things could still go badly wrong for London, Europe’s hedge fund central.
The hedge fund exodus from London’s West End predicted by some in the wake of plans for a 50 percent tax rate on high earners has so far failed to materialise, but some managers are nevertheless looking abroad.
Pedro de Noronha, managing partner at Noster Capital, told me over a full english breakfast at hedge fund central The Wolseley this morning that he would quit the UK if, as expected, the rate comes into force.
There has been no shortage of people lining up to lambast the EU’s draft directive on hedge funds and private equity.
But today the UK’s Financial Services Secretary Lord Myners stepped up the attack, criticizing the draft rules on leverage caps and where funds can be sold and promising a blitzkrieg of lobbying.
Disgruntled London-based hedge fund managers annoyed by the prospect of tougher EU rules and higher income tax shouldn’t pack their bags and fly to Geneva just yet, according to law firm Katten Muchin Rosenman Cornish.
At a breakfast briefing at London’s plush Capital Club this morning, legal experts said further details and amendments to the European Commission’s draft directive last month were likely, but said it was too early to decide to relocate.
The war of words is hotting up in the days leading up to next week’s draft EC directive on hedge funds and private equity.