EXCLUSIVE-UPDATE 1-Hedge fund Tyrus moves to Monaco-source

Wed Apr 11, 2012 4:08pm BST

(Adds detail, background)

* Move driven by extra regulation, tax-source

* Several hedge fund firms have exited UK in recent years

* Monaco could be favoured destination for departing managers

* Tyrus founder Chedraoui registered as Monaco resident

By Laurence Fletcher

LONDON, April 11 (Reuters) - Well-known London M&A hedge fund firm Tyrus Capital has moved the bulk of its operations to Monaco, one of the first managers to relocate to the principality in response to looming European Union regulation and UK tax rates.

The firm, which runs approximately $2.7 billion and which was founded by Tony Chedraoui in 2009, shifted most of its staff around the start of April, a source familiar with the matter told Reuters.

Tyrus's move opens up the possibility that Monaco, which is home to only a handful of hedge fund managers, could become a favoured destination for UK traders fleeing tighter rules and higher tax burdens.

Previously managers have largely opted for Geneva or elsewhere in Switzerland, but some in the industry have complained about a shortage of suitable housing or schools and the small-town lifestyle compared with London.

The UK still accounts for the bulk of the European hedge fund industry but several operations have shipped out in recent years.

The UK Financial Services Authority's register shows that Chedraoui, Charles Hopkinson-Woolley, who handles Tyrus's investor relations, and partner Xavier Portes became inactive at the beginning of this month, while chief operating officer Mark Madden became inactive at the end of February.

REGULATORY WORRIES

London's hedge fund community has become increasingly worried over forthcoming European Union regulations, which the industry fears could limit where funds can be sold and affect their use of leverage.

"I think it's driven by the EU regulation that's just coming through, which they see an onerous and unnecessary," the source said.

Hopkinson-Woolley spoke to Reuters but declined to comment on the group's actions.

Last year the firm set up an office in Monaco in response to concerns over tax and regulation, the Financial Times reported. At the time the paper said it was unclear how many of Tyrus's staff would move to Monaco, although it said that Chedraoui would stay in the UK alongside Madden.

Regulatory filings show that Chedraoui, who runs Tyrus's flagship $1.8 billion event-driven hedge fund and who is regarded by his peers as one of London's top event-driven managers, resigned as a director of Tyrus Capital LLP at the start of this month.

Hopkinson-Woolley, a former managing director at Deephaven Capital, Portes and Madden also resigned, documents show.

A regulatory entry for Tyrus Capital Services, a related company, shows Chedraoui's country of residence as Monaco.

Alan Howard, a co-founder of Brevan Howard and Europe's top-earning hedge fund manager in 2011, moved from London to Geneva, where 46 of its staff are based as at last year.

In 2010 BlueCrest Capital moved its headquarters to Guernsey, while most of its traders sit in either London or Geneva.

Hopkinson-Woolley's profile on social media site LinkedIn shows that he was a partner at Tyrus Capital LLP until last month, and this month became a director at Tyrus Capital S.A.M.

(Societe Anonyme Monegasque).

(Editing by Sinead Cruise and David Cowell)

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