Hedge Funds Bet Trump Trade War Will Spark Global Recession

THE TELEGRAPH: Investors race to sell shares in North American and European companies amid market turmoil

Hedge funds scrambled to sell shares in North American and European companies last month in a sign that the world’s top money managers are preparing for a global recession.

Hedge funds piled out of stocks which might be vulnerable to an economic slump in January, according to data from Goldman Sachs, amid growing concerns about market turmoil and the prospect of a global downturn.

The funds instead focused on buying shares that are most likely to withstand any incoming recession, including by picking up stocks that generate reliable returns regardless of the state of the economy, such as healthcare and utilities companies.

Bruno Schneller, of asset manager Erlen Capital Management, said: “The rotation into more resilient sectors suggests hedge funds are positioning for a potential economic downturn.” » | Louis Goss, Business Reporter | Tuesday, February 4, 2025

Swiss Village Cuts Tax Rate to Attract More Hedge Funds from London
THE GUARDIAN: Pfäffikon is already one of the two headquarters of Man Group, the world's largest publicly traded hedge fund, and UBS recently built a base in the Alpine enclave

One-in-four hedge fund managers have moved from London to Switzerland. Photograph: The Guardian
A peaceful Swiss village that has become an unlikely rival to Mayfair is cutting its income tax rate to attract more hedge fund managers from London.

The Swiss area of Höfe in Schwyz, which includes the village of Pfäffikon, plans to cut its basic tax rate to 15% from 17% next year. It hopes to attract hedge funds that are angered by higher taxes in Britain and the public outcry against the banking industry.

Surrounded by hills and meadows, Pfäffikon is already one of the two headquarters of Man Group, the world's largest publicly traded hedge fund, otherwise based in London. The Swiss bank UBS has also recently built a base in the Alpine enclave, near Zurich.

"We know that many London-based funds are not happy with rising taxes in Britain, so this is a reminder that Switzerland and Pfäffikon are positioning themselves as a hedge fund hub," said Marcel Jouault, of the business promotion department at Pfäffikon. "Many office buildings will be completed in 2011 and 2012. Lowering taxes will attract more businesses."

The village, once mostly dependent on agriculture, has registered more than 300 businesses so far this year, including Avis Asset Management, Commodity Partners, Fargill Investments, Sussex Partners, Hadrian's Wall Capital, Highland Capital Management and Twelve Capital.

Support businesses such as bookshops, travel agencies and beauty centres have proliferated. The city is also building a centre to host smaller hedge funds. >>> Elena Moya | Monday, October 18, 2010

Osborne in EU Hedge Fund Defeat
THE TELEGRAPH: Sources reveal Chancellor was given 'hospital pass' as City fears destruction of multi-billion pound sector

George Osborne is to admit defeat on new European Union rules to regulate Britain’s multi-billion pound hedge fund and private equity industry and allow finance ministers to pass a new directive which could badly damage the sector.

Sources close to the new Chancellor of the Exchequer said that although the British Government still disagreed with large parts of the directive, the process was now too far down the track to be stopped. “We know we have to pick our battles and this was one we had already lost,” one source said.

Mr Osborne, who took up his post in the Conservative-Liberal Democrat coalition Government last week, called Elena Salgado, the Spanish finance minister and present head of Ecofin, on Friday to discuss the UK’s position.

The British Government initially called for a delay to the crunch meeting in Brussels on Tuesday because the Government had only just been formed, but the appeal was rejected. >>> Kamal Ahmed and Rachel Cooper | Saturday, May 15, 2010

G20 Summit: Global Financial Crackdown Is Cost of Solving Crisis
THE TELEGRAPH: • New Financial Stability Board as global overseer • Tax havens and hedge funds to be punished • Heavy scrutiny for banks

Gordon Brown and his fellow world leaders have pledged the biggest crackdown on tax havens, hedge funds and banks in modern history as the price to be paid for the multi-trillion dollar bail-out of the world economy.

"The era of banking secrecy is over", the Prime Minister declared, as the Group of 20 leading nations agreed to impose a new range of regulations on banks and non-bank financial institutions as a punishment for contributing to the crisis.

Harsh fines and sanctions will be levied on tax havens that refuse to publish details of their accounts; hedge funds will have to provide more detailed accounts in the future; and bankers will have their bonuses more heavily controlled and taxed throughout the world, the communique pledged.

The range of new regulations will be implemented by national governments in the coming months, officials said, after the G20 agreed on more significant and far-reaching reforms than had been expected.

In what will be interpreted as a victory for the French and German factions, which had emphasised the importance of regulation over new fiscal giveaways, the G20 also ordered the creation of a new Financial Stability Board dedicated to monitoring leverage and inter-connectedness of international financial institutions. >>> By Edmund Conway Economics Editor | Friday, April 3, 2009

THE TELEGRAPH: G20 Summit: Blacklisted Tax Havens Face Sanctions

Tax havens that refuse to sign anti-secrecy agreements face expensive sanctions under an unprecedented global effort to catch illegal tax evaders.

Liechtenstein is among 45 territories blacklisted by the OECD and threatened with punitive financial retaliation for banking secrecy. Photo courtesy of The Telegraph
Switzerland, Singapore, the Cayman Islands, Monaco, Luxembourg and Hong Kong are among 45 territories blacklisted on Thursday by the Organisation for Economic Co-operation and Development and now threatened with punitive financial retaliation for their banking secrecy.

Among the sanctions being considered by the G20 are the scrapping of tax treaty arrangements, imposing additional taxes on companies that operate in non-compliant countries, and tougher disclosure requirements for individuals and businesses that use shelters.

Of the offending jurisdictions, 40 "have committed to the internationally agreed tax standard" but have yet to implement it. Only Costa Rica, Malaysia, Philippines and Uruguay have refused to sign up altogether. Jersey, Guernsey and the Isle of Man are fully compliant already.

Illegal tax evasion through offshore shelters has been a long-standing irritation for Gordon Brown, President Barack Obama and French President Nicolas Sarkozy. An estimated $7 trillion of assets are held offshore and, according to pressure group Tax Justice Network, developed countries lose $180bn a year in evaded taxes. >>> By Philip Aldrick, Banking Editor | Friday, April 3, 2009