Bluecrest hedge fund moves to low-cost Guernsey

Date: Friday, April 9, 2010
Author: Financial Times

One of London’s biggest hedge funds has quit the UK for tax purposes as the Government continues to fight for the confidence of corporate Britain.

BlueCrest Capital Management, which manages about $18 billion (£11.8 billion) and employs 350 staff, said in a letter to investors yesterday that it has relocated its tax headquarters to the low-cost jurisdiction of Guernsey.

Financial companies based in Guernsey pay an estimated corporate tax rate of about 10 per cent, compared with 28 per cent in the UK.

It is also understood that BlueCrest’s Guernsey office will not be caught up in controversial new hedge fund rules being planned by EU regulators.

BlueCrest, which plans to locate two partners in the new office, has already told staff and investors of its decision to open a large office in Geneva.

It will give traders and fund managers the option of moving to the Swiss canton, where they should be able to escape the new 50 per cent income tax rate for high-earners.

BlueCrest expects to have about 70 staff working in its Geneva office by the end of the year. Fund managers will have the option to remain in London. BlueCrest also has offices in New York, Boston and Singapore.

Although BlueCrest did not specify in its letter that its move was taxdriven, it is the latest British financial company to move either offices or staff offshore. BlueCrest declined to comment on its Guernsey move.