LONDON It's all go at Peter Stratford's Aston Martin dealership in London.
"There is more money than there was before," he said, pointing to a recent 1 million pound sale. "Aston Martin prices have gone through the roof in the last couple of years."
London's unique concentration of hedge funds, clustered around the leafy squares of Mayfair, are a particular boon for purveyors of luxury goods such as Stratford.
But new European Union rules curbing the upfront pay of hedge fund managers, set to be introduced this summer, could cool some of the more conspicuous consumption.
The EU's Alternative Investment Fund Managers Directive says 40-60 percent of a hedge fund manager's bonus must be deferred and no more than half can be paid in cash. The rest must be made up of units of their fund or an equivalent.
There is confusion about how the rules will apply in practice, with large gaps around the treatment of tax and dividends.
"It is potentially a massive concern if it all goes horribly wrong. But it is not yet clear (what might happen)," said one industry executive, who declined to be named because of the sensitivities around hedge fund remuneration.
London's hedge fund sector, which accounts for the bulk of the industry in Europe, is waiting for the successor to Britain's Financial Services Authority to publish its response to the directive in April or May. The FSA's wiggle room to make the rules less stringent, however, is limited.
"It is difficult. Managers like certainty and some of the gaps may never be filled in. It may be up to managers to determine their own approach," said Stephen Rabel, of consultancy Kinetic Partners.
In practice, many funds have already deferred manager pay, putting part of it into their funds because of pressure from investors.
"Most larger managers will have had this in place for some time," said an executive at one of London's biggest hedge funds. "It has come from investors saying 'Are you able to align yourself with us'?"
Hedge funds' bumper fee structures - traditionally a 2 percent management fee and 20 percent of performance but sometimes much more - have made the industry an easy target for politicians tapping into anti-banker sentiment in the aftermath of the financial crisis.
The EU parliament and EU states could agree on Wednesday to impose a cap on bankers' bonuses of double their base salary.
With hedge funds struggling to make returns in a low interest rate environment, the impending EU rules could have less of an immediate impact on them.
Some funds have not seen a performance fee for years, with the average fund barely breaking even in the past two years, and up just eight percent over five years, according to Hedge Fund Research data.
That said, there is still plenty of money sloshing around restaurants and private members clubs in Mayfair.
More than 80 hedge fund managers have personal fortunes of at least 50 million pounds, according to the Sunday Times Hedge Fund Rich List, and the income from management fees ensures even those not among the sector's top earners are still kept in Savile Row tailoring and fine wines.
With banker-bashing so popular, financiers are mostly keeping a low profile around the City of London financial district.
"It is not considered politically correct to be doing a lot of ostentatious spending in public anymore," said Sian Cox, a hospitality manager at Prism, an upmarket City restaurant.
"They might be spending their money on a country pile, or a Porsche or something but you are not actually seeing it in the City. They are not spending it on Chateau Petrus."
And in Royal Exchange Jewellers, a shop close to the Bank of England, owner Martin Deakins reported a sharp pick-up in sale of second-hand luxury watches.
WHAT'S THE ALTERNATIVE?
For fund managers wanting to flee the rules, the traditional bolt-hole of Switzerland may not be an option. Industry insiders expect managers outside the EU, for instance in Geneva, to be subject to the same guidelines if they sell into the EU.
In practice, despite periodic threats to move, hedge fund managers are loath to leave Mayfair and St James's, despite a 40 percent jump in rents in the past 3-1/2 years, according to property consultant Cushman & Wakefield.
Geneva is no real match for London's buzzing nightlife, swanky restaurants and upmarket shops despite having a top marginal tax rate of 44 percent compared with an income tax rate of 45 percent in Britain.
The Swiss franc has also strengthened around 20 percent against the dollar - in which most hedge fund firms earn their revenues - since summer 2010, increasing staff and office costs.
Some hedge funds are now homesick for London again.
"There have been managers that have moved parts of their businesses to other jurisdictions, such as Switzerland, but a lot get drawn back to London," said Roger Ganpatsingh, managing director at Throgmorton, which provides back-office services for funds.