CEO blog: Hedge funds, Brexit and the EU
By Jack Inglis, AIMA
Published: 03 July 2017
Now that the UK has begun to negotiate the terms of its exit from the European Union, the hedge fund industry has once again been cited in the process. At a speech in London last week, the former Liberal Democrat Leader and ‘Remain’ campaigner Nick Clegg said that Britain’s Brexit strategy was being shaped by an “elite” of hedge fund managers, right-wing politicians and newspaper proprietors. Mr Clegg went on to suggest that hedge fund executives in Britain regarded “EU-wide regulations [as] an overburdensome hindrance to their financial aspirations”.
The remarks, made at an event at Chatham House, echoed speeches that we heard in the run-up to the referendum itself and were a reminder that the myth of an industry opposed to official oversight and regulation persists, at least in some quarters.
We have said this many times before, but let’s be clear: the hedge fund industry as a whole was (or is) neither definitively pro- nor anti-Brexit. No hedge fund management firm took a corporate position. Some individual hedge fund business owners did publicly express a view but these were on both sides of the debate.
The over-riding concern from Brexit , then and now, is ongoing access – to investors and to talent. In terms of regulation, from the EU and elsewhere, the industry (as reflected in AIMA’s Policy Principles) has always supported regimes that treat investors fairly, promote transparency, protect shareholder and creditor rights, detect systemic risk and combat market abuse.
Yes, the EU Directive on Alternative Investment Fund Managers over-reached and has been problematic. But with it in place we at AIMA have continued to want to make it workable. There may be differences of opinion within our industry on the rights and wrongs of Brexit, but we can all agree that good and workable regulation reassures investors, promotes financial stability and helps the industry to grow.