WALL STREET JOURNAL 13.7.09
Investors Fight EU Hedge Fund Plans
Some of Europe's leading institutional investors have said they will oppose the proposed new European Union rules on alternative investments, claiming they would significantly limit their investment options and make pension provision more expensive.
The UK's National Association of Pension Funds and its Dutch and Irish counterparts said they were protesting against the measures. The European Federation for Retirement Provision, a lobby group based in Brussels, has written to the European Commission outlining its concerns and requesting changes to the proposals.
Lindsay Tomlinson, the incoming chairman of the National Association of Pension Funds and European vice-chairman of asset manager Barclays ...
[remainder of article on subscription only but reporeted by Open Europe as ----]
Lindsay Tomlinson, the incoming chairman of the NAPF and European Vice-Chairman of asset manager Barclays Global Investors, said: "if implemented as drafted, [the directive] would have many consequences that in aggregate do not seem to benefit investors. The problem in amending this draft is to decide where to start". Richard McIndoe, Head of the Strathclyde Pension fund, one of the biggest of the UK's local government schemes, said: "As an investor in private equity, I don't see further regulation of the industry as necessary", adding that the Directive "will have a dramatic impact on the affordability of defined benefit pension schemes".
Meanwhile, Jerry Moriarty, Director of Policy at the Irish Association of Pension Funds, said: "Irish pension schemes have been steadily increasing their holdings in alternative and international asset classes and, if implemented, the directive would adversely impact their diversification strategies".
Dan Hannan MEP’s Telegraph Blog 13.7.09
Boris Johnson is right: the EU's hedge fund rules will destroy the City
The City is staring into the abyss. If the proposed EU directive on hedge funds goes through, London will go the way of Bruges, Venice and Amsterdam: a once dominant financial entrepôt sidelined by more virile cities.
This, of course, is precisely what some in the EU want. I have lost count of how often I’ve heard voices raised in Brussels against London’s “jungle capitalism”. In the eyes of many Continental politicians, the Square Mile is parasitical: a lawless free city, whose lax regulations caused the financial crisis. They deeply resent the fact that 80 per cent of managed equity and hedge funds are based in London.
Now you can blame an awful lot of people for the credit crunch: banks, credit agencies, Central Banks, Treasuries. I’d say the FSA has sneaked away with less than its full share of the responsibility. You could even make a pretty strong case against the Clinton-era legislation that pushed banks into lending too much to the sub-prime sector in the first place. The one set of people you can’t blame are managers of private equity. The trouble is that, in the current mood, no one is much disposed to draw such distinctions: bankers, hedge-fund managers – they’re all pin-striped spivs, right?
Honourable mention, then, to Boris Johnson, who has made an unarguable case against the draft legislation. “Hedge funds won’t go to Paris or Frankfurt, they’ll go to New York or Shanghai”, says the London mayor. “What is good for London is good for the UK and what is good for London is good for Europe.” Indeed.
The real question is how the British Government ever allowed these wretched proposals to come so far. The excellent Charlemagne [in The Econbomist -cs] offers three explanations: that hedge fund manages are bad lobbyists; that the case for lighter regulation of anything is hard to make in current circs; and that Britain sold the pass at the G20 summit when, his eyes on a new Bretton Woods system, Gordon Brown foolishly conceded the principle of more regulation for the sector.
As long as Labour is focused on its internal woes, no one is watching out for the national interest. The case for an early election is overpowering
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