In what Swiss authorities hope is a sign of things to come, ex-London hedge fund shop Krom River Partners has relocated to the Alpine tax haven of Zug, Switzerland.
The two-year-old, US$810 million commodities hedge fund made the move despite what CEO Chris Brodie called the “very good marketing tool” of the U.K. Financial Services Authority regulation. And though the relocation coincides with the rollout of a variety of tax changes the Swiss government hopes will help make it a hedge fund center to rival London and New York, taxes are apparently not the only reason for Krom River’s decision.
According to the Financial Times, Krom River’s partners were drawn to Zug, a lakeside town of 23,000 about 15 miles south of Zurich, in part to leave their London commute behind in favor of the rugged outdoors available in their new home.
But taxes did play a part: Krom River’s partners expect to see their personal taxes fall by about 75%, from a top rate of 40% to about 10%. And the firm was unhappy with the prospect of aggressive tax inspections that could disrupt operations.