Sunday, 23 October 2016
Last updated 2 days ago
Nov 10 2010 | 12:39pm ET
There has been an exodus at big U.K.-based hedge funds, but not to Switzerland or other tax-friendly climes.
Instead, the industry has been ruthlessly cutting back on high-level staff in an effort to cut costs, according to research firm Imas. During the first nine months of this year alone, 70 large and mid-sized hedge funds—defined as those employing between 10 and 50 Financial Services Authority-registered employees—had cut more than 300 senior investment and sales professionals, nearly a quarter of the 1,288 they employed at the beginning of the year.
"It shows the continued pressure on costs—one company grew its staff, but the rest mainly lost them," Olly Laughton-Scott of Imas told Financial News. But the cutbacks have nothing to do with higher taxes in the U.K. for high earners or with impending European Union regulation.
"Oversees companies are under the same competitive pressure and it is easier to cut back foreign activities that to do so closer to home," Laughton-Scott said, explaining the 47% cutbacks seen at the U.K. offices of foreign hedge funds.
Meanwhile, some top money managers have been leaving their firms to launch hedge funds of their own as the industry bounces back from the financial crisis.