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Matéria do The Independent

New York is the leader but London is catching up fast
By James Moore
Published: 11 April 2007
New York still dominates the hedge fund industry but London is beginning to snap at the heels of its rival.
Hedge funds were, of course, an American invention but - despite what was widely seen as a crackdown last year - the less prescriptive style of "risk based" UK regulation is increasingly helping Britain's capital to bridge the gap.
One only needs to take a drink in one of more exclusive bars in Mayfair after a look around the district's luxuriously appointed office space to see that these are boom times for the industry.
According to the Alternative Investment Management Association (AIMA), Europe accounts for around 20 per cent of the $1.5 trillion hedge fund industry, and the UK has four- fifths of that. London is also now growing faster than its transatlantic rival. "London has been growing faster than New York for some time now," said Florence Lombard, executive director at AIMA. "We believe this is because it is a professional and efficiently regulated environment that both managers and investors are comfortable with."
Perhaps the most prominent hedge fund manager in the City in recent months has been Christopher Hohn, the founder of TCI. That is thanks to the Southampton University graduate's ability to force sweeping changes at some of Europe's most high profile companies.
Hohn last year had to deal with a rare setback after the stock exchange operator Euronext resisted his attempt to force a merger with Deutsche Börse in favour of an alternative deal with the New York Stock Exchange.
But shareholders (including TCI) hardly suffered as a result of this and Mr Hohn moved on to bigger fish - he was responsible for putting the Dutch bank ABN Amro into play.
His intervention has already had the desired effect on the lumbering Dutch bank's share price and his name is beginning to strike fear into company boards all over the Continent. Mr Hohn is ranked at 22 in the Trader Monthly 100 list of top earning traders with an income estimated at $275m.
However, the top earners in London are Pierre Lagrange and Noam Gottesman, whom the list says earned $450m each.
Their GLG Partners appears to have been little scathed by the loss of the star trader Philippe Jabre and a hefty fine from the Financial Services Authority in the midst of last year's crackdown.
That is perhaps because it has been phenomenally successful; ask anyone in the business to name the top five hedge funds in Britain and GLG will be in there. With $9 billion under management it is second only to the granddaddy of them all - the London-listed Man Group, which is the biggest independently quoted hedge fund group.
No discussion of London's most prominent hedge fund managers should leave its former boss, Stanley Fink, off the list. Mr Fink may have stepped down as chief executive, but his legacy lives on. Starting out as an obscure commodity trading company, under Fink, Man Group shot into the FTSE 100, and then the FTSE 50 list of Britain's biggest companies and still just keeps on growing. Between 2003 and the beginning of this year its market value had nearly quadrupled.
The flagship AHL fund may have suffered some difficulties in recent weeks, but such is Man's diversity that it hardly mattered. The institutional businesses picked up the slack.
The majority of hedge fund groups, however, remain in private hands.
Another star is William Browder from Hermitage Capital Management. The $275m man has made his name with bets on the Russian energy market. Given the volatility shown by those markets, it takes nerves of steel to be involved, something Mr Browder, who splits his time between London and Moscow, obviously possesses.
The former Credit Suisse banker Alan Howard can hardly be said to have had it all his way last year, although his flagship fund still returned a healthy 11.5 per cent and the list has his earnings at $225m (although it notes the firm calls this "grossly over-estimated").
Like many successful hedge fund managers, he founded Brevan Howard Asset Management after leaving an investment bank's proprietary trading desk. Despite the seven-figure bonuses paid by banks, it is a route that many continue to follow.
With these sorts of earnings available, that is no wonder.