U.S. Enters Europe’s Fund Debate
As its hedge-fund and private-equity industries worry about new rules, the U.S. is quietly lobbying Europe to change the terms of proposed financial regulation that could place strict new rules on any U.S. hedge- or private-equity fund doing business in the region, according to a senior Treasury official. The move wades the U.S. into a fierce battle between the U.K. and other parts of Europe over how tough regulation should be. Some nations, led by Germany and France, are calling for wholesale regulation of financial services in the wake of last fall’s crisis, but the U.K. says that overly stringent rules would damage its large financial sector and close off U.S. and other funds to European investors. The U.S. and U.K. are lining up to change the European Union’s proposed Alternative Investment Funds Directive, a sweeping bid to overhaul regulation of hedge funds, private equity and other alternative investment funds. In its current form, the directive would, among other things, place limits on how much debt funds can take on; require them to hold capital to cover potential losses and redemptions; and place strict disclosure requirements on private-equity portfolios.[...]








