Hermes, the UK pension fund, has criticised European Union proposals for tighter regulation of the hedge fund industry.
The controversial draft regulations would require alternative fund managers to register and seek authorisation and were drawn up as a response to the risks taken by some financial institutions before the crisis.
Kathryn Graham, a director at Hermes, told the FT that the proposals in their current form could have unintended consequences.
??Restricting choice is not the appropriate thing to do, and an increased cost burden on fund managers will simply be passed on to pensioners. There are second and third derivative effects from this legislation that will have a major impact on what we do.? said Ms Graham.
The draft directive has previously drawn the ire of many hedge fund managers because of the proposed strict passporting arrangements, leverage limits and higher capital requirements on alternative investment funds.
Hermes, which is in discussions with European Union officials about the impact of the proposed changes, has £25.7bn of funds under management.
