British and other European hedge funds are flocking to the shores of Lake Zurich in Switzerland, hoping to find a safe haven from increased taxes and regulations, according to a recent story in the Guardian.
Several funds have apparently followed London-based Man Group, the world’s largest publicly traded hedge fund, which moved to the Swiss mountain village of Pfaffikon a few years ago. Hedge fund managers saw the writing on a wall with increased public anger about big payouts, higher taxes without much in return, and government leaders posturing about reigning in the hedge funds’ independence.
Instead, they’re staying one step ahead by moving to a more welcoming community. The small village of Pfaffikon (population 10,000), for example, is already home base for Horizon, LGT Group, RMF, Quaesta Capital, Aeris Capital and Westport Private Equity. Other funds have settled in nearby towns, attracted by the clean air, peaceful lifestyle and close proximity to ski resorts.
David Butler, a founding member of Kinetic Partners, a London-based consultant to hedge funds, is quoted as saying his firm has moved 23 funds to Switzerland in the past 18 months.
If the trend continues, anyone looking for a hedge fund job in the City of London will have to contemplate relocating to Switzerland and brushing up on their German or French. Though the trade-offs in lifestyle are clearly positive.