Hedge Funds To Be Subject To EU Bonus Rules

Jul 1 2010 | 2:03pm ET

Hedge fund managers may have dodged the European Union’s controversial proposed alternative investment rules for the time being, but they won’t dodge the tough bonus restrictions included in that directive.

EU fund managers will be subject to new compensation and bonus rules expected to be approved by the European Parliament next week, as most firms—those owned by insurance companies are notably excepted—will be considered credit institutions under the bank pay rules.

Under the proposal, no more than half a hedge fund manager’s total compensation can be paid out as a bonus. What’s more, only 30% of bonuses can come in the form of cash, and at least 40% must be deferred for a period of years.

How, exactly, hedge funds are to meet the second requirement is unclear. Banks will be forced to pay out the bulk of their bonuses in stock, but most hedge fund managers are not publicly-listed.


In Depth

JOBS Act Propels Real-Estate Crowdfunding Platform

Oct 21 2014 | 2:57am ET

If D.J. Paul were a real estate development, he would be described as “multi-use...

Lifestyle

Balyasny Pays Over $6M For Lakefront House

Oct 22 2014 | 10:29am ET

A venture headed by hedge fund manager Dmitry Balyasny just paid $6.2 million for...

Guest Contributor

Hedge Funds Weather A Data Management Perfect Storm

Oct 22 2014 | 12:28pm ET

From a regulatory standpoint, nearly every development since the crisis has placed...

 

Videos

Editor's Note

    Guidelines for Guest Articles

    Oct 22 2014 | 9:46am ET

    We are always looking for guest articles from hedge fund managers and buy-side firms.

    If you are interested in submitting a contributed piece for possible publication on FINalternatives, please take a look at the specs. Read more…

 

Futures Magazine

October 2014 Cover

Deeply flawed risk benchmark

Most traders agree that proper risk management is the key to successful trading. However, many traders depend on the deeply flawed measure of standard deviation as a benchmark of risk. Here we put it ...

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.