London's `Twin Pillars of Doom' May Spark Hedge Fund Exodus to Switzerland

Discussion in 'Professional Trading' started by ASusilovic, Apr 30, 2009.

  1. April 30 (Bloomberg) -- After helping to move 23 hedge funds to Switzerland from London in the past two years, David Butler describes the flow as a “steady trickle.” Now he’s bracing for a flood.

    “Call it the twin pillars of doom,” said Butler, a founding partner at hedge fund consultancy Kinetic Partners LLP in London. “Put together the U.K. tax changes and what the ogres in France and Germany have created and you will see a mass migration.”

    Butler said inquiries about relocations have gone up “by a factor of 10” since Britain pledged a new 50 percent rate for top earners on April 22. Many came from fund managers already mulling a move after the U.K. tinkered with tax rules for non- domiciled workers last year. They’re calling again after the European Union, backed by France and Germany, proposed yesterday to regulate buyout firms and hedge funds managing more than 100 million euros ($134 million.)

    The EU is pushing for tighter regulation with an “all encompassing” approach after markets fell in 2008. The hedge fund regulatory threshold was lowered “at the last minute” at the urging of Socialists in the European Parliament.

    “The directive has been allowed to become a politically motivated attack on the U.K.’s successful investment management industry,” said Richard Perry, a partner in the financial services practice at Simmons & Simmons, a law firm in London. The measure may drive many fund management businesses outside Europe, he said. “This could inhibit the growth of London’s hedge fund industry significantly.”

    Leaving London

    London, home to at least 80 percent of Europe’s estimated $400 billion in hedge fund assets and about 60 percent of Europe’s private equity firms, may suffer as funds decide leaving is easier than complying with new regulations.

    “There is a profound disincentive to base businesses in Britain that could as easily be run from Zurich, Dubai or for that matter New York,” Simon Walker, chief executive officer of the BVCA, the U.K. buyout industry’s lobby group, told reporters in London on April 29. “This is one of the biggest problems: it’s a disincentive to run businesses out of London.

    Welcome in Switzerland !
  2. wave


    Just make sure you got cash in your pockets if you get pulled over for speeding.
  3. labour socialist govt just pandering to the electorate. elections are coming and the party of churchill will sweep to power
  4. just21


    Hopefully they will abolish stamp duty on stock purchases.
  5. :cool:
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  6. :)
  7. LOL ! You made some experience with the Swiss police, what ?
  8. Xellent ! :)
  9. zdreg