SwissInfo- With only four out of around 9,500 hedge funds domiciled in the country, the moneymen fear a bonanza is slipping from their grasp. Surprisingly though, these specialists are pointing the finger at the tax and regulatory systems.
Hedge funds are investment vehicles with membership restricted to very wealthy individuals or organisations with sophisticated market knowledge. This closed membership structure allows the funds to take bigger financial risks in alternative investments with relatively few regulatory restrictions.
They are regarded as one of the most aggressive and successful investors in recent years, pumping billions of dollars into the global financial markets. But their risky strategies have been blamed in some quarters for causing recent stock market instability.
Nevertheless, the Swiss Federal Banking Commission (SFBC) issued a report earlier this week calling for more to be done to attract hedge funds to Switzerland. It believes the strong Swiss financial market is underrepresented compared to New York, London and even Luxembourg.
Switzerland does well from investment vehicles known as funds of funds, which repackage and resell hedge funds, handling about a third ($200 billion or SFr237 billion) of the global business.
But because the hedge fund managers are located outside its borders, Switzerland enjoys less than one per cent of the $1,400 billion (SFr1,661 billion) of wealth they create worldwide.
