London-based partner Barney Reynolds, head of the firm's Financial Institutions Advisory & Financial Regulatory Group, was quoted by the Financial Times on Sunday, May 15 on post-crisis rule-making coming from the European Union, including the Alternative Investment Fund Managers directive, MifidII and Basel III.

Reynolds commented on the impact of AIFM on the London hedge fund community. “The debate has been and gone,” he said. “If you can show that an aspect of the directive could have negative consequences at a systemic level, they may change it during the negotiations to finalise the Commission’s rules. But if you are just arguing it will cost you more, there is no chance. The fact is, much of it is best practice and some aspects of it—such as better custody protection—will improve the landscape for hedge fund investors.”

Reynolds also pointed out that hedge fund managers are increasingly impacted by US regulation, especially Dodd-Frank, as well as UK and EU regulatory requirements. “There was a time when fund managers were only tangentially affected by the UK and EU regulatory framework," he said. "That’s no longer the case.”

The article noted that, as a result of increased capital activity in Hong Kong and Singapore, London is under some pressure to regain its foothold as a "destination for unfettered capitalism." Said Reynolds, “The UK was pretty bombastic for a number of years and wound up its EU partners with its boast that it had ended boom-and-bust with prudent financial control and regulation. It needs to continue to rebuild relationships and leadership authority in Brussels.”