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August 30, 2006
London 'may lose hedge fund listings'
Private equity groups and hedge funds are calling on the Financial Services Authority to accelerate changes to the listing rules currently being reviewed by the City regulator.
At the moment private equity groups and hedge funds are unable to list vehicles on the London Stock Exchange because the listing rules are too stringent.
But under changes being consulted on by the FSA as part of its review of the European Union's Transparency Directive, such listings would become possible.
Any changes, however, would not come into effect until the end of next year at the earliest and the industry is warning that the London market could lose out on some significant flotations being contemplated by hedge funds and private equity groups if the changes are not brought forward.
One adviser to the industry said: "I have a number of hedge fund clients who have been waiting for the January deadline but would not wait for the end of the year. They will instead consider listing before this period in Amsterdam."
A number of private equity groups have in recent months chosen to list vehicles in the Netherlands. In April Kohlberg Kravis Roberts, the US private equity giant, listed a $5bn fund in Amsterdam.
More recently, Apollo, another private equity company, floated a $2bn fund on Amsterdam's Euronext exchange.
Private equity vehicles currently choose to list on the Alternative Investment Market, London's junior exchange, and in Continental cities such as Amsterdam because of the less stringent rules governing disclosure and control of the underlying investments.
"The FSA needs to decide between competing policies of keeping London open to investment and a tight quality control threshold," said Peter Linthwaite, the chairman of the British Venture Capital Association.
"At the moment the FSA has an open mind about the topic rather than a conclusion."
-The Telegraph-
Posted by su at August 30, 2006 10:19 AM