Sweeping new rules would require all hedge fund and private equity managers in Europe to detail their activities to financial regulators and meet minimum capital requirements.
A draft of a proposed European Union directive, seen by the Financial Times, makes clear that the new regulatory emphasis for “alternative” funds will be on managers, rather than funds directly. It will apply equally to hedge fund and private equity managers, as well as those handling other vehicles such as commodity and real estate funds.
The new rules, the first of their kind in the world, are being drawn up following heavy pressure from world leaders – most recently at the G20 – to extend the regulatory net to all players in the financial markets. But while hedge funds seemed relatively sanguine about the EU’s approach on Friday, the proposals were immediately attacked as “illogical and disproportionate” by the private equity industry.
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