This is utterly batty. If you have a great deal of money to invest you don’t go to the Post Office or a bureaucracy you seek out a company with a good track record, with good, innovative staff. For that company to get that staff they must pay what it takes - that’s competition!
To talk of “a level playing field for the whole financial sector” is the dead hand of the state on your throat. Europe - and London in particular - will wither away till it no longer counts. Property prices in Singapore will boom.
Separately, the FT reports that BlueCrest Capital, one of the UK's largest hedge funds, is looking to relocate 50 of its staff to Geneva, amid growing concerns about London's status as a centre for alternative asset managers.
Christina
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EU OBSERVER 12.11.09
EU presidency wants pay caps for fund managers
ANDREW WILLIS
The Swedish EU presidency has indicated that it favours pay restrictions for hedge fund and private equity managers similar to those currently being debated for European bankers.
The plans will be contained in the latest package of proposed amendments to the draft Directive on Alternative Investment Fund Managers (AIFM), and could be released as soon as this week.
The AIFM, published by the European Commission before the summer, aims to tighten up rules in parts of the EU's financial sector that currently receive little attention.
Speaking a conference in Stockholm on Wednesday (11 November), Swedish financial markets minister Mats Odell said the pay curb proposals would be "very close" to rules being discussed to limit bankers' pay packages.
Mr Odell added that there needed to be a "level playing field for the whole financial sector."
EU lawmakers are currently looking at adjustments to the bloc's capital requirements directive in a bid to limit pay for bankers, including measures to defer bonuses over several years.
But Florence Lombard, executive director of the Alternative Investment Managers Association, said the plans were inappropriate as hedge funds, unlike European banks, had not received government bailouts, reports Bloomberg.
Regulation step-up
While hedge funds and private equity funds are considered to have played a relatively small part in starting the financial crisis, the large size and murky nature of their transactions has caused lawmakers to shine a brighter spotlight on their activities.
Alternative Investments Funds domiciled in the EU were valued at €2 trillion at the end of 2008, leading to fears that the failure of a large fund could destabilise the financial sector as a whole.
In its current shape, the draft EU directive will require hedge-fund managers and private-equity firms overseeing at least €500 million to report to regulators.
It forms part of the EU's response to the financial crisis, although the plans have drawn criticism for being both too lenient and too restrictive.
The Swedish EU presidency aims to have some level of agreement on the plans by the end of the year, but a full vote in the European Parliament is unlikely before the second half of 2010.
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TELEGRAPH 12.11.09
EU: regulate hedge fund pay, just like the banks
The European Union may try to extend the restrictions on bank pay and bonuses to hedge fund and private equity managers too.
By Louise Armitstead, Chief City Correspondent
The powerful Swedish contingent of the European Commission [That phrase is meaningless! Does she mean the soon to expire Swedish presidency of the Council or what? The Council and the Commission are two completely separate bodies ! -cs] has suggested that it intends to include proposals to regulate pay as part of its recommended ammendments for the controversial directive on Alternative Investment Fund Managers (AIFM).
Mats Odell, Sweden's financial markets minister, told a conference in Stockholm that the European Council's amendments, which are expected imminently, will include proposals that "will be very close" to rules on bankers' pay.
Proposals on bankers' pay, which are also being debated by EU parliament, include measures on clawback, deferrals and share payments.
Mr Odell's remarks will come as a shock since the Swedish contingent, which have the Presidency, have been seen as allies to those fighting the directive.
Documents being circulated last months indicated that Sweden was determined to dilute the directive including its proposals on borrowing limits and the "passport" system for non-European funds.
But there is growing support to restrict bumper pay in financial services. A hearing in Brussels this week was told by one witness that "in the same way that remuneration and fees structures caused the risks within the banks", the high levels of pay within hedge funds and private equity also posed a threat.
Florence Lombard of AIMA said comparing managers with bankers is misguided.
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