City A.M. Reporter
THE Association of British Insurers yesterday hit out at proposals from a top European lawmaker that would limit the ability of European pension funds to invest in third country funds. <br /><br />Jean-Paul Gauzes MEP, the rapporteur in the European Parliament for the EU’s proposed Alternative Investment Fund Managers (AIFM) directive, is suggesting that there should be limits on pension funds that want to invest in third country funds that have no national marketing agreements.<br /><br />But Peter Montagnon, the ABI’s director of investment affairs, hit out at the plans. <br /><br />“There is a real danger of throwing the baby out with the bath-water with this directive. Those who invest in financial markets on behalf of European savers need to be able to make sensible decisions within a well-regulated global market and not, as proposed, be excluded from key markets, he said”.<br /><br />Gauzes also said hedge fund managers should commit themselves to a cap on how much they will borrow, something many will see as an unwelcome restriction on a much-prized freedom to switch investment strategies quickly.<br /><br />His proposal is in stark contrast with the position of Sweden, which is trying to get a deal among EU countries for lighter hedge fund rules before its term as EU president ends in December.<br /><br />Both the European Parliament as well as the bloc’s countries share responsibility for writing the final version of the law and Gauzes, who will present the changes parliament wants made, is key to this process.