Singapore Hedge Fund

Alternative asset management in Singapore

London Mayor: Hedge Fund might leave London for Singapore

We are Migrating the blog here: – faster, better,bigger…….

I know, it sounds like a tabloid headline but basicaly not too far from the truth 🙂

Mayor warns EU not to strangle world’s premier financial centre

The Mayor of London, Boris Johnson, today called on the Government to help him resist the EU Commission’s dangerous plans to regulate financial services. He fears that the plans could threaten London’s status as the global capital of financial services, and will result in European investors losing out and seriously damage the capital’s financial services industry. The Mayor fired off his warning directly to Lord Mandelson as he addressed a major economic conference in London, attended by both the Business Secretary and Shadow Chancellor, George Osborne.

Boris Johnson told delegates that he is so concerned he has sought an urgent meeting to personally lobby EU Commissioners and make the case for London. He singled out the EU draft directive on Alternative Investment Fund Management as a measure that would seriously weaken the European marketplace for hedge funds, private equity and venture capital. It will substantially reduce the choices available for investors, put up protectionist barriers around Europe, and give a huge competitive boost to financial centres outside the EU, such as New York, Singapore, Hong Kong, and Geneva – to Europe and London’s ultimate disadvantage.

In London alone, the private equity and venture capital industry directly employs around 7,000 people and it is estimated a further 35,000 people are employed directly and indirectly by hedge fund managers.  The industries are overwhelmingly based in the capital, with 80 per cent of European hedge funds and 60 per cent of European private equity funds located here. Sources close to the hedge fund industry estimate that their tax contribution alone is around £3 billion per annum. More importantly, many commentators, including EU Commission’s influential report by Jacque de Larosiere, have agreed that the hedge fund industry combined with other alternative funds do not pose a material systemic risk to the financial system as a whole.

The Mayor said: “I support strong and sensible regulation of financial services to prevent a recurrence of the financial crisis that everyone in Europe is now suffering. However, in my book this means regulating at the right level. As financial services are a global business, this must be set at a global level by the G20.

“My greatest worry is that this is just the start of a flood of draft directives that will start to filter out of Brussels. London is the home of hedge funds and private equity, but having a strong hedge fund and private equity industry is not just good for London, it is good for Europe. No other European city’s financial services sector is competing on the same international level as London, and the EU Commission must recognise this. That is why I’ve decided to personally take the lead on this and lobby key figures. London’s main competitors are outside the EU, including New York and Hong Kong, so it’s blatantly obvious that this unilateralist approach will damage our competitiveness.”

The Mayor is keen to ensure that any European regulation of the financial services industry appreciates that London is competing with international cities such as New York, Geneva, Hong Kong and Singapore. As a result the Mayor is calling for more effective international regulation that works across all of the capital’s competitors and for draft EU legislation to assist, not cut across, those efforts. He is encouraging the government to engage much more swiftly before these directives are issued so that the regulation is right for Europe, the UK and London.

The Mayor’s comments were part of a speech on his proposals for London’s economic development, set out in Rising to the Challenge, published in May. The conference, organised by the London Development Agency, is bringing together over 300 leading politicians, business people, commentators and policy makers to discuss and debate the key issues facing London’s economy and to help develop solutions to shape the future of our capital.

In his speech, he called for London to promote more powerfully its position as the world’s undisputed capital of business and ensure that central government work with the city to help keep the capital highly competitive in future. He committed to maintain London as a world-leading low carbon capital, undertake initiatives to improve Londoners’ skills and employability and to continue to invest in projects for London’s long-term economic growth.

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3 Responses

  1. […] London Mayor: Hedge Fund might leave London for Singapore … Tags: championship, from-the-truth, Headline, mayor, returned-home Headline, […]

  2. REG CROWDER says:

    Of course, Boris Johnson has every right to be heard on this.

    But, you know, I’m remembering the old saying that every army is ready to win the war that just ended.

    I wonder if it might be more helpful to worry about the clients leaving, as opposed to worrying about where the office is.

    From what I hear the clients TODAY want clarity, accountability and transparency. You know, it was just unthinkable to believe that Bernie Madoff might be a crook. But he was…

    There are number of companies that have in the past run hedge funds or provided advisory services to institutions that, in effect, assisted institutions in their own hedging strategies. A growing number of these companies in the hedging business, broadly defined, are skipping the whole regulatory argument and launching fully-registered ETFs and Mutual Funds.

    One that comes to mind is AQR Capital. It has launched three indexes, AQR Momentum Index, AQR Small Cap Momentum Index and AQR International Momentum Index. And to apply these indexes to the markets they have launched three new no-load mutual funds, AQR Momentum Fund, AQR Small Cap Momentum Fund and AQR International Momentum Fund. (I have no idea as to whether they are any good.)

    So, the merry band at AQR, about whom I know almost nothing, aren’t going to be burning up a lot of brainpower, time and money fighting regulatory issues. They’re going to be out there trying to sell their funds and trying to make money for their investors.

    Personally, I’m not that comfortable with momentum investing. But there are many smart people who are. And the folks at AQR now have vast, new freedom as to how they tell their story to those investors who’d like a fully regulated, transparent momentum product.

    Just a thought.

    Financial & Investment Writer
    London, England & Brittany, France

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