Telegraph.com.UK- If there is one thing that unites both candidates in France’s presidential run-off this Sunday, it is a shared belief that Anglo Saxon hedge funds are the great villains of modern civilisation.
Nicolas Sarkozy, the neo-Gaullist favourite, has vowed to “hit predators” with a tax on speculative investments – apparently a version of the Tobin tax, a staple of populist discourse in Europe for years.
“We can’t tolerate hedge funds buying a company with debt, firing a quarter of the staff and then enriching themselves by selling it in pieces. We didn’t create the euro to have capitalism without ethics or morals,” he said. Mr Sarkozy is supposed to be the “free market” candidate.
But for all the hot rhetoric, France quietly hosts some 92 hedge funds – many of them on the cutting edge of arbitrage and structured products, and some linked to Mr Sarkozy’s inner team of advisers. The country has the second biggest hedge fund sector in Europe.
“Look at what we do, not at what we say,” said Vincent Kuhn, managing director of Bryan Garnier asset management in Paris.
“A sweet smell of sulphur surrounds the hedge fund industry here. We’re lumped together with all the cosmopolitan speculators said to be wrecking the French economy,” he said.
“Of course, the French love to regulate and they believe in the supremacy of politics over reality, but it never works and both candidates will end up toning down their policies.”
French hedge funds fled the country in the 1990s when stringent rules shut them out of the most lucrative trade. Most followed Ivan Briery’s Voltaire fund to London.
