By Nick Evans
One swallow does not make a summer, sure enough. But the news that BlueCrest is moving its corporate headquarters and regular investment and support professionals to Switzerland, gives pause for thought - not least as it comes in the midst of a general election in the UK where all three parties are competing to give the City the biggest kicking.
The fact that one of the most successful London-based hedge fund groups is now no longer London-based, although 70% of its group-wide staff will continue to be based in the UK, is not in itself particularly significant as far as the hedge fund industry is concerned.
But it does feel like a milestone event of some kind. And what it does signify is that the biggest hedge fund groups - particularly those that most closely resemble the banks and investment banks from which the likes of BlueCrest, Brevan Howard and many others span out - are having to position themselves for the post-crisis changes that are being forced on the wider financial system.
As BlueCrest founder Mike Platt said in his letter to investors, the business risk of being overly dependent on a single jurisdiction is substantial. Tax, regulation, proposed new bank and trading levies, the EU directive - change, and uncertainty, is everywhere.
What is more, the big firms also need to anticipate a possibly permanent culture change among a younger generation of traders and bankers who are sick of being vilified, resentful at having to bear the burden of punitive tax rises and more than happy to work in places other than London.
A top executive at another of London's large hedge fund groups said the other day that his firm had recently been in talks to recruit two highly talented traders away from investment banks. Both were keen to join. But one would do so only if he could be based in Geneva, while the other would only consider working for the firm in Hong Kong. In the event the firm hired one, but not the other.
Similar situations and discussions are doubtless taking place all across London's hedge fund community, just as they are within the banks themselves. And so, although we remain sceptical about the prospect of any sudden mass exodus of hedge funds out of London, the possibility of a gradual loss of talent to other locations is a much more real threat.
It is not so much a question of existing hedge fund groups moving out of London. For many principals, they have already made plenty of money, their families are established in schools and so on, their employees are settled and there is little incentive to undergo the hassle of moving.
But that is not the case with new hedge funds that are being set up from scratch - not least those coming out of the banks as they cut back their risk-taking activities and as their top traders conclude that life in the independent hedge fund sector is likely to be a whole lot more rosy, lucrative and fun than in an increasingly regulation-strangled and capital-constrained banking sector.
Nor is it the case with younger managers, traders, analysts, programmers, operations staff and so on - who are at earlier stages in their careers, and who understandably are likely to be more influenced by tax rates and general lifestyle choices where London has as many disadvantages as advantages.
"We are strongly of the view that the new group structure, including the establishment of the Geneva office in particular, will enhance the group's ability to recruit and retain the best talent in our industry," said Platt, adding that the firm was in discussions with new recruits "for whom the prospect of a Geneva location is a significant attraction versus other opportunities".
Most hedge fund managers and other financial industry participants will be waiting until the result of the general election before deciding what to do for themselves - and what contingencies to put in place for their staff, many of whom may want to leave the UK more than their principals do.
For most people and most businesses, the decision on whether or not to relocate is a highly individual and complex calculation - and not one to be made lightly. It involves upheaval, uncertainty, expense and aggravation.
But bit by bit, people - and businesses - may start to ebb away. It will not happen overnight and the process may be slow and gradual. So BlueCrest's move may not mark the start of a mass migration. But it does show that the threat to the UK, and to the EU as a whole, is real.