Wednesday, 17 December 2014
Last updated 6 hours ago
Oct 4 2010 | 1:45pm ET
Hedge fund managers leaving the U.K. will cost the country's Treasury some £500 million in lost tax revenue, even though the feared "exodus" has yet to materialize.
About one in four hedge fund employees have moved from London to Switzerland, according to Kinetic Partners. The Financial Times conservatively estimates that those roughly 1,000 people pay nearly £500 million in taxes every year—assuming that they were paying the 28% corporate tax rate on their average earnings of between £1.5 million and £2 million per year.
The exit of just two people alone is responsible for £200 million of the loss: Brevan Howard Asset Management's Alan Howard and BlueCrest Capital Management's Michael Platt. Leaders of Europe's largest and third-largest hedge fund firms, respectively, the two decamped to Geneva this year, taking with them several group of top traders, whose tax-generating potential is not included in the lost £200 million.
Britain's decision to raise taxes on its highest earners to 50% from 40%, along with growing fears of strict new European Union regulation, are behind most of the decisions to leave London, the world's second-largest hedge fund center, for the regulation- and tax-friendly Alpine climes of Switzerland.
Dec 1 2014 | 10:21am ET
As 2014 winds down, Northern Trust Hedge Fund Services executives took some time to share their outlook on trends facing the industry in 2015. Read more…
Jeff Sprecher was simply looking for a platform to trade energies when launching ICE 14 years ago but it has grown to reach the pinnacle of both the listed futures and equities world.