For all their footloose talk, it seems that European hedge funds are more reluctant to leave London than they are letting on. Proposed European Union regulation had been expected to drive them offshore. Instead, some have found a way to sashay around the rules and stay put. GLG, Brevan Howard and RWC have already set up so-called Ucits, undertakings for collective investments in transferable securities. Man Group, Europe’s largest fund manager, is due to announce the creation of its second Ucits fund next week.

Ucits have several benefits. The newly proposed restrictions on leverage will not apply; rather, funds’ value at risk is examined. As EU-regulated vehicles, available since 1985, they should also help renew investor confidence in the sector. This gives hedge funds greater access to pools of capital available through intermediaries that traditionally demand high levels of transparency. Private banks, for example, are major distributors of investor money into Ucits.