As regulators in Europe seek to tighten their oversight of alternative investment managers, hedge fund professionals may just find the U.S. to be a more welcoming environment.
According to a Bloomberg report, EU lawmakers are nearing an agreement on hedge funds that would restrict the ability of funds based in offshore tax havens to raise money from EU investors. The new law would create a “black list” of countries, with European investors being prohibited from sending their money to funds in these blacklisted countries.
To stay off the blacklist, countries would have to adhere to a new list of EU rules. The rules include having regulations against money laundering and terrorism financing, sharing information with EU regulators, and ensuring access for EU-based depositories and tax agreements.
While the new laws were aimed at hedge funds that are managed in Britain, but park their money in the Cayman Islands and other offshore locations, it could impact U.S. funds, too. Already, U.S. Treasury Secretary Timothy Geithner has complained that the legislation could unfairly block U.S. funds from marketing to EU clients.
On the other hand, the new laws may make the U.S. a more attractive location for hedge funds and private equity firms. That’s the opinion of hedge-fund manager Frank Brosens, co-founder of Taconic Capital Advisors, a NYC multi-strategy firm, speaking at the recent Bloomberg Markets Hedge Fund Summit in New York.
What’s your opinion? Will the European clampdown on hedge funds drive more clients – and create more hedge fund jobs – for U.S. firms? Add your comments below.
{ 1 comment }
I think yes it would. Though it is believed that the new legislation is needed to ensure financial-market stability and won’t affect managers who follow the rules, this would damage Europe as well as Britain as the industry would simply relocate back to the US. The most affected will be London, which is home to the most of global HF industry, if the reg is put.
Comments on this entry are closed.