Not only is Europe’s debt problems bludgeoning the U.S. markets today, but the continent is also on the verge of dealing a huge blow to the hedge fund industry and its favorite tax havens.
Lawmakers in the European Union are close to passing legislation that would prevent European investors from putting money into a hedge fund domiciled in certain offshore tax havens. The proposal would create a “black list” of countries that would be off-limits to EU investors and the Caymans appears to be a prime candidate for the list.
As expected the hedge fund industry is outraged. By some estimates, nearly 80 percent of all U.S. funds have a registered entity in the Caymans.
