Europe could scare off every single hedge fund if it enacts ridiculously strict regulations.
It’s Europe’s prerogative to implement whatever regulations it wants, but it’s also these companies’ prerogative to do business anywhere they want.
Switzerland would make an easy transition for many.
FINAlternatives: Many have predicted a hedge fund exodus should the controversial European rules—which once included draconian limits on trading and leverage, and now include equally unfriendly rules governing pay—be adopted. But few have gone as far as Michael Raffan, head of the financial services group at Freshfields Bruckhaus Deringer.
“No hedge funds will operate from within the EU,” Raffan told the Financial Times, noting that the exodus would be “rapid and decisive.”
“Hedge funds are much more mobile than banks,” he warned. “It’s much easier for three guys in Mayfair to pack their bags and move to Geneva.”
Hong Kong or Singapore would be other options, welcoming funds with open arms and lower taxes. It’s not like you can’t invest from the other side of the world these days.