Responding to today’s news of EU finance ministers’ backing of hedge fund regulation, Stuart Opp, global investment management leader at Deloitte, commented: “Whilst today’s news offers some relief that both the European Council and European Parliament have been able to agree on their respective bargaining positions, it merely affirms our previous view that this regulation will lead to a disproportionate drag on investor returns. The alternative industry has received much criticism in recent years, however, they are a critical component of the capital markets, and any regulation needs to be appropriate.

“The endorsement of proportionality by the parliament is undeniably positive, and we hope will be able to mitigate the impact for smaller managers that are less able to absorb these additional costs. The divergent positions regarding marketing passports for non-EU managers will inevitably lead to further uncertainty for the industry however. We hope that forthcoming discussions between the Council and Parliament will result in investors being able to freely access best in class products irrespective of geographical domicile or political preference.”