Relocated Hedge Funders Swamped By Soaring Swiss Franc

Aug 23 2011 | 11:54am ET

The hedge fund managers who fled London for Switzerland are learning that there may be more powerful forces than higher taxes.

A handful of hedge funds relocated to Switzerland, and many others opened offices there, in the wake of the U.K.'s decision to increase its top tax rate from 40% to 50%, giving employees a way to avoid the higher levies. But those who have done so may be regretting it: Whatever they might be saving in tax they appear to be losing due to the skyrocketing cost of living in their Alpine tax haven.

The value of the Swiss franc has soared 25% against the dollar over the past year-and-a-half, putting a real crimp into the average hedgie's purchasing power.

"Everything is getting very expensive," Glen Millar of Kinetic Partners, which has made a tidy business of helping hedge funds open their doors in Switzerland, told The Telegraph. "In Basel and Geneva, a lot of people are going across the border to do their shopping."


In Depth

Q&A: High Conviction, Low Correlation

Oct 30 2014 | 7:35am ET

Acadian Asset Management's numbers are big: over $70 billion in assets under management...

Lifestyle

Ex-Hedgie Steyer Gives $56M To Climate Action Super PAC

Oct 28 2014 | 9:23am ET

Retired Farallon Capital founder Tom Steyer has poured almost $56 million into his...

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

Demeter: Family affair

David and James Hamman launched their fundamental Livestock and Grains Program in March of 2010 but it really was decades in the making.

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.