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EU commission told to re-evaluate hedge fund directive

The EU commission is coming under serious pressure from hedge fund and private equity companies to rein in the hedge fund directive which has the potential to add billions of pounds to the cost base of an industry which is vital to the long-term financial growth of the worldwide economy. It appears to many as though the EU commission has jumped on the bandwagon and attacked hedge funds and private equity companies, who have and continue to make big money, using this as a means to increase taxes and increase income for the European Union.

However, for every large profit a hedge fund of private company reports there will be many more companies making significant losses after taking potentially large risks with some of their investments. However, we need to appreciate that without hedge funds and private equity investment the liquidity in the worldwide money markets would be impacted and indeed companies may in many cases struggle to raise finance they require to continue to grow.

Hedge funds and private companies are always painted as the "big bad giants" but in many ways they play a central role in business development and business growth. Adding potentially billions of pounds to the cost base of this particular industry will not only reduce the funds available for investment but might also push companies to take larger and larger risks which could have a detrimental effect on the worldwide economy as a whole.

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