Morning:
8°c
Dozens of millionaire traders at one of London's most powerful hedge funds are to quit London for Switzerland ahead of the Labour government's 50% top tax rate hitting from next April.
Belgravia-based BlueCrest Capital Management, reckoned to be among the top five hedge fund management firms in Europe, is looking at opening an office in Geneva.
When it does, and the firm is expected to make the decision soon, at least 50 of BlueCrest's high-earners will relocate there.
The decision is the most high-profile tax avoidance relocation by a London-based hedge fund since the Chancellor revealed plans for a 50% tax rate for those paid more than £150,000 a year. Accountants and lawyers have been predicting an exodus to Switzerland but only a few firms have made the move.
BlueCrest is the first of London's big five hedge fund managers to announce such plans. The other fund managers are Man Group, which owns 25% of BlueCrest, GLG Partners, Lansdowne Partners and Brevan Howard, who together account for about 40% of money invested in London hedge funds.
BlueCrest, which has £7 billion under management, is run and 75% owned by Mike Platt, 41, and William Reeves, 45, former star JPMorgan traders who set it up nearly a decade ago and are said to be worth £250 million apiece.
Their star traders include Leda Braga, reckoned to be London's most successful female hedge fund manager, who runs BlueCrest's award-winning money-minting investment strategy BlueTrend. A spokesman confirmed: “BlueCrest is considering opening an additional office in Geneva.”
The spokesman denied the move was “an exodus”, saying opening an office in a major financial centre like Geneva was a sound business decision.
It is understood BlueCrest will keep its headquarters at its offices on Grosvenor Place, overlooking Buckingham Palace, from where the majority of its 350 staffers will continue. The spokesman refused to comment on whether Platt, Reeves or Braga, who all keep homes in London, will be taking advantage of the Swiss tax regime.
Switzerland is a popular choice for so-called “tax tourism” as wealthy individuals can effectively negotiate their own tax rates. Swiss tax rates are generally around 25% though there have been reports of UK-based executives getting offers of rates of around 10%. There are also low tax rates on dividend income. Platt is one of the London hedge fund industry's more colourful characters, recently bagging a yellow Fiat decorated by the artist Damien Hirst at the annual over-the-top Ark industry dinner and auction.
He also has a reputation as a fearsome trader, who invests his own money in his firm's strategies. At a recent analysts' conference call in which he predicted a “bloodbath in gilts” because of the inflation that will follow the Bank of England's money-printing quantitative easing programme, Platt said: “We're not making long-term investments or analysing companies or determining what we think is value.
“We're very much more oriented towards trading opportunities in the markets. From a macro perspective and certainly in the last 19 years that I've been trading, I've never seen an environment as good as this for trading strategies.”
Reader views (32)
Wow! Britain really is turning into a country of small minded losers. Success is a dirty word just like it was in the 70's. Very depressing that no one learns from history. Brown = Callaghan, Old Labor = New Labor. Same old, same old Socialist losers.
- James Macleod Ritchie, Oyster Bay Cove, 18/12/2009 14:23
Report abuse
Some people fail to differentiate between the investment bankers working for firms who have been backed by the british tax paying public, and the hedge fund managers who have not and who never will be. hundreds of hedge funds go bust every year without affected the wider economy. the flight of these firms away from london can only negatively affect the city and wider economy.
good riddance? do people not realise we do not have a manufacturing or export industry - the only think we can trade on internationally is our intellectual capital.
- Tim, London, 16/11/2009 12:10
Report abuse
The more tax you pay the more money Labour will squander? If VAT was reduced to 5% you would see a boom beyond belief. But, UK politicians have no imagination. This is now a nation of Soviet Socialist proportions.
PS. I am just an ordinary working man and even I can see that high taxes are crippling us.
- Frederick, London, 13/11/2009 07:25
Report abuse
"When VAT and basic rate tax has to rise to replace revenue lost from higher earners, lets hear you squeal then.
- Stephen, London"
...That's not squealing, it's cheering at the prospect of you all leaving London. I'll be happy to pay a bit more tax if it means getting shot of all you psychotically greedy socially useless blood-sucking parasites. We were a rich country long before you lot came along, and where do you think all that money you're chucking into your casino trading operations actually comes from?
Just spare us all your whining and screaming about how much worse we are all going to be without you, and get packing.
- Kate, London, 12/11/2009 22:42
Report abuse
If they leave i hope they have their passports cancelled and then have to apply to re-enter the country.
- Barbus, Liverpool, 12/11/2009 22:41
Report abuse
We really don't need people like that in the country, so good riddance.
Money isn't everything and they surely don't contribute anything else.
- Nick, London, 12/11/2009 21:46
Report abuse
Greed = wanting to keep 60% of YOUR money, the money you earn?
or
Greed = wanting to take 50% of someone else’s money?
Who's money is it anyway?
I'm in the top tax rate bracket but I will support any tax rate as long as it's applied to everyone in the same way. 50% tax for ALL tax payers! Allowing the majority to set a high tax rate for the minority doesn't seem right.
- Jerry, Richmond, 12/11/2009 21:09
Report abuse
Stephen, London - Spot on
- Dave Davies, Basingstoke, Hants, 12/11/2009 20:52
Report abuse
Lets see how much Switzerland bails them out next time - that's why only a few like Bluecrest will go. The rest know the Swiss won't pay for their incompetence. The City knows it has no idea what its doing and sooner or later they will again need a compliant/gullible government to help them out, and if they've all moved to Geneva/Frankfurt they know they'll get short shrift since those economies are as dependent upon them as we are.
Lets get rid of them all and concentrate on building an economy not dependent on financial services.
- Tony, London, 12/11/2009 20:32
Report abuse
Greed = wanting to keep 60% of YOUR money?
or
Greed = others wanting to take 50% of YOUR money?
Who's money is it anyway? Let's have the same tax rate for everyone. I'm in top bracket but I'll support any rate as long as it's applied to everyone in the same way. Takers?
- Jp, Richmond, 12/11/2009 20:24
Report abuse
And theres me thinking only, striking Trade Unionists held the Country to ransom. held
- Colin, South Kensington, 12/11/2009 19:45
Report abuse
i agreed with Jim,London,UK...only small minded would disagreed. All these people make uk economy to stay alive.Simple.
- Waheed, London, Peckham, South East, 12/11/2009 19:05
Report abuse
Just let them go on the understanding that they will not be allowed to come back because they have been classified as " undesirables ". People who dodge paying their lawful amount of tax are no use to anybody. The legal distinction between tax avoidance and tax evasion needs to be closed. Any kind of tax avoidance should be treated as tax evasion because that is what it actually is, trying to dodge paying the right amount of tax.
- Frank, UK, 12/11/2009 18:39
Report abuse
So long as we make the enterprising and successful pay more and more tax, and allow the feckless and lazy to swallow up more and more welfare, for so long Bitain will be a failure
- Professor David Marsland, Reading, UK, 12/11/2009 18:30
Report abuse
OH NO!
I'd better get my botox done swiftly, put on my glad rags and bag one of these rich men before they flee the country. Failing that can anyone kindly lend me the air fare to switzerland?????
- Teeeee, London, 12/11/2009 18:08
Report abuse
what is the greatest generator of tax for this country? the city. it is extraordinary, the venom from readers, they should save it for the people who earn nothing and bleed the system dry. why don't people get more angry about those who contribute nothing, and never intend to ?? only a moron would welcome the loss of wealth from the city.
- Maria, berks, 12/11/2009 17:31
Report abuse
How much more money one can want ,we should all feel sorry for these people for money they will go and live someplace they did not want.do they know they can not take with them when they die.There are lots of people who love to live here what ever it costs them Look at Sir Paul of The Beatles.
- Vural Gurses, london, 12/11/2009 17:30
Report abuse
I hope the higher rate tax payers contribute less tax next year than this. It will be worth it to wipe the smiles off the faces of all the small minded, bitter and twisted people making ridiculous comments like "good riddance". When VAT and basic rate tax has to rise to replace revenue lost from higher earners, lets hear you squeal then.
- Stephen, London, 12/11/2009 16:34
Report abuse
I couldn't agree more with this comment - well put!
Hedge funds have not had tax payer money! They take risk s which should not be taken by our banks who now cannot fail due to Tax payer guarantees. Bankers should be taxed at higher rates! However all high earners who create jobs and employ such as manufacturers or other business people outside banks/banking should be attracted with lower rates. Simples!
- Not In Financial Services, London
- Ken Joralemon, London, UK, 12/11/2009 16:23
Report abuse
Good riddance. I worked for a small alternative asset manager recently. A banker they had hired 7 months before whinged about only getting a Euro 100,000 bonus for that short period saying " But I've got a standard of living to maintain". They don't get it do they. Even if hedge funds and PE houses were not directly responsible for causing the current financial meltdown, they were part of that "nuclear arms race" of salaries and bonuses which led to their MBA investment banking chums in the banks to take ridiculous risks with other peoples's money so that they too could get access to these obscene bonuses. As Sir Adair Turner of the FSA said, a lot of their activities are socially useless.
- David Stephens, London, 12/11/2009 16:05
Report abuse
Why don't they just go; instead of making a big song and dance about it?
They say as one door shuts, another door opens.
- Mickinlondon, london, 12/11/2009 15:59
Report abuse
Nick/Darren - you obviously have no idea, like most of the ill informed public. As Joseph Y says - obtaining 40% of 'masses', as opposed to 50% of fewer amount, is just backward thinking.
Most of the above individuals, pay for their children to be privately educated. theyre most probably all on private healthcare. So, where oh where are they draining our economy?! they pay contribute more than any, including their organisations.
Its short-sighted people like you, that are the problem.........not these guys. And before you point the finger - I'm in the lowest tax-band.
Oh, and just for the record. When Regan came into power in the US, he lowered taxes and guess what was the outcome.........the highest ever ratio of tax receipts. there would be less tax 'avoidance' if the actual 'taxes' themselves were lower.
- James, Kent, 12/11/2009 15:47
Report abuse
Good riddance. If enough of you greedy parasites clear out, the rest of us might be able to afford to live here.
- Kate, London, 12/11/2009 14:40
Report abuse
In reply to Jim, I earn a six figure salary and will actually be happy to pay 50% tax on it, plus NI. As I earn more I think it entirely fair that I should pay proportionately more towards the well-being of this country. Even after this tax hike I'll be very comfortably well off, so those few idiots who flee the country really are just gormless greed merchants.
- Nick, Battersea, 12/11/2009 14:23
Report abuse
Do people honestly believe that these high earners are paying their full share of tax?
Good riddance.
- Darren, london, 12/11/2009 14:05
Report abuse
Hedge funds have not had tax payer money! They take risk s which should not be taken by our banks who now cannot fail due to Tax payer guarantees. Bankers should be taxed at higher rates! However all high earners who create jobs and employ such as manufacturers or other business people outside banks/banking should be attracted with lower rates. Simples!
- Not In Financial Services, London, 12/11/2009 13:55
Report abuse
The amount HMRC are losing in annual revenue due to these departures should be taken out of next year's benefit payments - then the plebs and lazy morons of this country will see how much they require their tax. It will also serve as a natural cull which this country desperately needs.
- Harvey, York, 12/11/2009 13:46
Report abuse
Once again greed and envy rear their ugly head. This country needs these people they generate vast amounts of revenue for the UK tax payer.
Those that say good riddance etc are never going to achieve anything in life. Losers all.
- James Town, Braintree UK, 12/11/2009 13:41
Report abuse
To the brain deads who say good ridance, these people pay a huge amount of tax, and before anyone says it, they pay their fair share and them some. A percentage is paying your share, and hiked to 40% is bad enough, but 50%, and additional stealth tax for the 50%'ers means enough is enough. In practive how would you like it if the government took 70%+ of what you earnt.
Small minded fools.
- Jim, London, UK, 12/11/2009 13:01
Report abuse
50% of nothing instead of 40% of millions.
High tax destroys tax revenue. Blatently obvious to all outside government.
- Joseph Yossarian, London., 12/11/2009 12:38
Report abuse
Good riddance. They will have to come back to London anyway for all their meetings. Plus there is nothing to do in Switzerland anyway apart from going down hill on carbon-based materials, so they will come and spend their "hard earned" money here.
- Darren, london, 12/11/2009 12:28
Report abuse
Cheerio then - your selfishness and greed won't be missed by anyone. And please don't bother coming back when the Tories get in:)
- Nick, Battersea, 12/11/2009 11:57
Report abuse
