Asset Managers Worry Over 'Letter Box' Hedge Fund Rule

Jul 13 2012 | 12:50pm ET

Hedge funds aren't the only asset management shops worried about the European Union's tough new alternative investment regulations.

Twenty traditional asset managers and investors are warning that the planned rules will have unintended consequences for their own businesses. The firms, which include Allianz, BlackRock, Fidelity Investments and Schroders, argue that one of the new regulations, which seeks to prevent hedge funds from registering at a "letter box" in one jurisdiction while operating from another, is too broad.

The asset managers told Michel Barnier, the European Commission's internal markets chief, that the rule could hurt their own ability to have risk and portfolio management decision-makers based in the market in which they are investing.

"We are extremely concerned that the forthcoming 'Level 2' implementing measures for the Alternative Investment Fund Managers Directive will undermine the single market," even disrupting UCITS fund management, the firms wrote.


In Depth

GSAM’s Papagiannis on Liquid Alternatives

May 25 2016 | 5:07pm ET

The popularity of liquid alternatives strategies has blossomed in recent years,...

Lifestyle

From Modern Trader: Stephen Curry is a Black Swan

May 18 2016 | 7:43pm ET

What do the rise of the Internet, the sinking of the Titanic, 9/11, and Stephen...

Guest Contributor

LendingClub and the Question of Internal Hedge Funds

May 19 2016 | 8:42pm ET

Peer-to-peer lending platform LendingClub Corp. has been in the news since the firm...