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AFP – The European Central Bank has warned that European Union plans to regulate hedge funds and private equity groups could tilt the playing field against EU companies.
The ECB’s position could influence the rewriting of proposed rules drafted by the European Commission.
“The ECB supports the intention to provide a harmonised regulatory and supervisory framework for the activities of alternative investment fund managers (AIFMs) in the European Union,” it said in an opinion requested by the Council of the European Union.
Reuters – The European Central Bank has warned that EU plans to tighten regulation of hedge funds and other alternative investors risk creating a two-tier playing field that could drive the industry out of Europe.
European governments and the European Parliament have the final say on a new law that will require a wide range of alternative investment fund managers to register and disclose information to supervisors if they want to operate in the 27-nation bloc.
New York (HedgeCo.net) – London-based government fixed-income specialist firm, Capula Investment Management LLP, has appointed BNY Mellon as provider of global hedge fund custody services for their flagship hedge fund, the Capula Global Relative Value Master Fund Limited.
“We selected BNY Mellon as a global custodian as in the current economic environment it is important – to both the firm and to its clients – to have a provider with the financial stability to ensure the safekeeping of our assets. Neil McCallum, chief operating officer at the $4 billion Capula Investment Management LLP, said.
“BNY Mellon is committed to helping our hedge fund clients reduce their counterparty risks. Our appointment gives Capula an additional custody option with a custodian of recognized quality.”David Aldrich, managing director and head of alternative investment services EMEA, at BNY Mellon said.
Reuters – Hedge funds and private equity could face more than 3 billion euros in costs and investors could see fund choice shrink by up to 40 percent due to proposed new EU rules, a Financial Services Authority report said.
The analysis of the impact of the Alternative Investment Fund Managers (AIFM) directive conducted by Charles River Associates and commissioned by the FSA found that it could load one-off costs of up to 3.2 billion euros on the affected parts of the funds industry.
Telegraph.co.uk – Coupland Cardiff’s chief operating officer Deborah Boyce said: “As we invest exclusively in Asia, this Directive will mean that we have no choice but to relocate outside of the EU should we wish to continue to operate.”
She was one of a host of figures from the private equity and hedge fund industry to attack the draft Directive in response to a call for evidence from a UK parliamentary committee.
Private equity group CVC said: “It is so poorly drafted that it creates a new category of risks and inefficiencies”.
Guardian.co.uk – Boris Johnson, who is leading the fight against a European crackdown on City financiers, faced accusations of being “bought off” today, when it emerged that more than half the money donated to his mayoral campaign came from the financial sector including hedge funds and private equity.
Johnson has criticised the EU’s so-called “hedge fund directive,” draft rules published in the spring which would limit debt levels for alternative investment managers, such as hedge funds, and force them to be more transparent.
New York (HedgeCo.net) – Based on two surveys of private equity managers and hedge fund managers, carried out during August 2009, Open Europe has published the most comprehensive study to date of the likely impact of the EU’s proposed Alternative Investment Fund Managers (AIFM) Directive. Among the findings is that the hedge fund and private equity industries contribute €9 billion ($13.3 billion) in tax revenues to European Union (EU) governments.
Open Europe said that the €9 billion ($13.3 billion) tax contribution would be enough to fund the EU’s entire overseas aid budget for 12 years. The tax contribution also matches the value of the EU’s Cohesion and Aid Programmes for Poland and is just short of the subsidy that France receives each year under the EU’s Common Agricultural Policy.
“Alternative investment fund managers provide investments and create growth, jobs and more efficient markets across Europe,” the report said.
The survey also found that the UK hedge fund and private equity industries contribute about €6.1 billion ($9 billion) in tax revenues to HMRC. Open Europe said this would be enough to pay for more than 200,000 nurses, 45,000 hospital consultants or 165,000 teachers. In just two years, the tax revenues generated by alternative investment fund managers would be able to pay for the entire 2012 London Olympics, according to Open Europe. But if the tax revenues were to disappear, Open Europe said it would take a 20% increase in council tax in order to make up the shortfall.
The European Commission’s Alternative Investment Fund Managers (AIFM) directive would cost the hedge fund and private equity industries in the EU between €1.3 billion and €1.9 billion ($1.9 billion and $2.8 billion) in its first year, if implemented in its current form. The annual recurring cost would be between €689 million and €985 million ($1 billion and $1.4 billion). Respondents said their total compliance costs would increase by almost one-third on average.
The report commented: “Our surveys show that unless a range of amendments take place, the AIFM directive will impose substantial costs across the board, without offering sufficient benefits for the industry, investors and the wider economy… In a worst-case scenario, thousands of jobs and millions in tax revenues could be at stake.”
Open Europe received 121 responses from hedge fund managers and fund of fund managers representing $342 billion assets under management. Just over half of the respondents came from managers located in the UK, while over one-fifth came from the rest of the EU and around one-quarter from the rest of the world. Open Europe also received 41 responses from private equity managers primarily based in the UK, representing funds under management of over $204 billion.
Alex Akesson
Editor for HedgeCo.net alex@hedgeco.net HedgeCo.Net is a premier hedge fund database and community for qualified and accredited investors only. Membership on www.hedgeco.net is FREE and EASY. We also offer FREE LISTINGS for Hedge Funds!
Bloomberg – The European Union’s proposed rules for hedge funds and private equity firms may cost as much as 1.9 billion euros ($2.8 billion) in the first year and 985 million euros annually thereafter, an industry survey says.
The Directive on Alternative Investment Fund Managers would regulate and place capital requirements on any funds managing more than 100 million euros. The proposed measure would boost compliance costs by about a third, according to the survey of 121 hedge-fund managers and 41 private-equity managers managing a combined $550 billion, according to Open Europe, a London- based research organization.
EurActiv – French financial market regulator AMF has aligned itself with British opinion on the EU draft directive to reign in alternative investment funds, in contrast with the strictly pro-regulation stance of French President Nicolas Sarkozy.
At a conference in London, UK Financial Services Minister Paul Myners and the chairman of French market regulator AMF, Jean-Pierre Jouyet, outlined their major points of contention with the EU draft directive to regulate alternative investment funds.
Guardian – French Bank Societe Generale’s Lyxor Asset Management expects to double the assets under management in its managed accounts platform to about $25 billion by the end of the year, reclaiming ground it lost in 2008’s wave of redemptions, a senior executive said on Wednesday.
Inflows into Lyxor’s managed account platforms have risen more than 50 percent so far in 2009, taking its total assets under management to $20 billion after they halved in 2008, Antoine Broquereau, head of structuring and alternative investment solutions at Societe Generale Corporate Investment Banking.
New York (HedgeCo.net) – A Leg To Stand On is celebrating the sixth anniversary of their annual benefit, Hedge Fund Rocktoberfest. It is being held at B.B. King Blues Club in New York on Thursday, October 8.
The Rocktoberfest Wildcard Play-Off is being held tomorrow, September 16, at Sullivan Hall in New York, where four bands made up of hedge fund and related industry professionals will battle it out to perform at Rocktoberfest.
The event unites a rapidly growing number of A Leg To Stand On supporters for a unique night of rock-and-roll performances by members of the hedge fund and alternative investment communities. Since 2004, Hedge Fund Rocktoberfest has served as A Leg To Stand On’s signature fundraising benefit. Due in large part to the support received through this one night, A Leg To Stand On has been able to directly help over 3,000 children through the provision of free corrective surgeries and prosthetic and orthotic devices.
An estimated 10,000 children have been helped through A Leg To Stand On’s training workshops, aimed at teaching innovative best-practices in orthopedic care to in-country medical providers. In January of 2009, A Leg To Stand On committed to helping a total of 11 project partners in Haiti, Nigeria, India, Bangladesh, Nepal, Colombia, Ecuador and Peru.
Alex Akesson
Editor for HedgeCo.net alex@hedgeco.net HedgeCo.Net is a premier hedge fund database and community for qualified and accredited investors only. Membership on www.hedgeco.net is FREE and EASY. We also offer FREE LISTINGS for Hedge Funds!
Reuters – A draft European Union law to regulate the managers of hedge funds and other alternative investment funds may be strengthened despite fierce opposition from Britain and industry, a senior EU lawmaker said on Friday.
The bloc’s governments and the European Parliament have joint say on the measure which is part of wider EU and global efforts to learn from the crisis by shining a light and directly supervising all parts of the financial system.
