Consultants report surge in interest among UK fund managers considering relocation overseas

Written by Ray Clancy

Wednesday, 14 April 2010 10:00

An increased number of UK based fund manager are inquiring about relocating overseas due to tighter regulations and tax rises, it is claimed.

Although there has been no major exodus yet the number of queries relating to moving out with the UK has increased by 80% in recent weeks, according to global consulting group Laven Partners.

The fact that the alternative investment management industry is potentially going to be exposed to new scrutiny by the draft Alternative Investment Fund Managers’ Directive, which promises to introduce new regulations in the European Union could also lead to more interest in moving.

Only last week BlueCrest, one of London’s largest hedge funds, announced it was moving its tax headquarters to Guernsey. It is also opening an office in Geneva.

One other prominent fund planning on opening offices in Geneva is London-based Brevan Howard Asset Management LLP, Europe's largest hedge fund with nearly $30 billion under management.

‘Although the topic of re-location has been on everyone’s minds for the past couple of years, we have seen a sharp increase in genuine interest since the start of 2010. Managers are keen on finding out what their options are. It is not just the managers, we have also been approached about re-domiciling funds,’ explained Jerome Lussan, Founder and chief executive of Laven Partners.

Many do not have a clear idea of their target location yet, but the majority of enquiries are about Switzerland.
‘Although there are more benign tax regimes to move to, relocating to another jurisdiction is not straightforward. Foreigners in Switzerland profit from lower individual income tax levels thanks to tax benefits which are granted on an individual basis,’ said Lussan.

‘However, the Swiss taxation structures and rules are quite intricate. The trick is to plan and structure the move properly. I wouldn’t leave at the drop of a hat because obtaining a favourable tax ruling isn’t always a given right,’ he explained.

He added that even although more ppeople are exploring the option of moving at least some of their teams out of London many managers have decided that the disadvantages of moving, both personal and professional, outweigh the tax advantage.