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Benedicte Gravrand, Opalesque London:

Most assumed, up until now, that since hedge funds and private equity funds were never the beneficiaries of state bailout last year and this during the credit crisis, and since they were recognised as not being at the root of the crisis, that they would be let free to roam in their own sphere. Of course, there is the prospect of impending regulations, meant to put a leash on the industry players… but in the mean time, compensations are still in the free zone.

Not so for European hedge funds, it seems. Once again, the European Union, in its campaign to control alternative investment fund managers (AIFM), is trying to impose restraints and delays on pay – with no well-informed justifications for doing so. The zeitgeist seems to be on moderation; but what’s a European hedge fund manager to do if such “moderation” measures are shackles to the trade?

The Swedish markets minister said on Wednesday the European Union rules to cap bankers' bonuses to prevent excessive risk-taking should include hedge funds and private equity firms. Sweden then distributed a draft of recommendations on the EU AIFM Directive (which it had been working on since entering the rotating EU presidency), creating a strong reaction in the industry, which called on lobbyists to object.

On Friday, Reuters obta......................

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