New draft regulations under the alternative investment fund manager directive to increase the control over the hedge fund and private equity industry were approved yesterday by EU finance ministers.

George Osborne  agreed on the EU directive on his first visit to Brussels as UK finance minister. Talks will begin on May 31 with a view to outlining a set of rules before the summer break. EU ministers agreed to note the concerns expressed by the UK which hosts about 80 per cent of Europe’s hedge fund industry.

Aima chief executive Andrew Baker warns that if the EU pushes through a this directive the impact will extend far beyond the hedge fund and private equity industries that are the main target of the legislation.

“We are particularly concerned about measures that would ban European investors from accessing funds [domiciled] outside the EU. Major investors in alternative investments include pension funds and insurance companies, and there would be very negative social consequences across Europe if their investments were adversely influenced by such a ban."