BLUECREST Capital Management, which recently said it would open an office in Geneva, is continuing to move out of the UK by re-locating its headquarters to Guernsey in the Channel Islands.
Michael Platt, the founder of the blue chip hedge fund, told investors in a letter that regulation was a factor in his decision to quit the UK.
The move offshore means that BlueCrest will not be affected the European Alternative Investment Fund Managers (AIFM) directive, which City A.M. launched a campaign against last year.
It is understood two partners from BlueCrest will staff the new headquarters.
Sources close to BlueCrest told City A.M. that the move had nothing to do with taxation, but the UK’s latest income tax hike for Britain’s wealthiest earners has led to a number of fund managers searching for sanctuary overseas.
Guernsey is popular with hedge funds because the corporate tax rate is about 10 per cent, compared with 28 per cent in the UK.
Platt has previously said that the opening of the fund’s new Geneva office “will enhance the group’s ability to recruit and retain the best talent” and is likely to house as many as 70 BlueCrest employees by the end of 2010.
Other funds opening offices in the Swiss tax haven include Man Group, GLG Partners, and Brevan Howard.
EU regulation of the hedge fund industry has frustrated the City. The latest version of the AIFM directive requires non-EU alternative funds to gain a “EU passport” to be able to market their products to investors.
US Treasury Secretary has also hit out at the new regulation. He recently wrote to European finance ministers saying it would “discriminate against third country funds and fund managers by denying them the opportunity to access the EU single market.”
He added: “It is my hope that this provision will be revised to provide non-EU funds, fund managers and global custodians the same access as their EU counterparts.”
BlueCrest also has offices in New York, Boston and Singapore. It employs 350 staff and has between $15bn (£9.8bn) and $20bn of funds under management.