London-based conservative newspaper the Daily Telegraph and its free rival, City AM, launched campaigns against the EU's proposed regulation of alternative invetsment funds.
The Telegraph has coined its campaign 'Ditch the Directive'.
Both newspapers enjoy healthy penetration rates in London's City as they focus on financial news. City AM, founded in 2005, litters London's business districts as it is handed out on the streets and in underground stations.
According to public relations managers, the City is "noticeably more worried" about the pending regulation.
US, UK join lobbying forces
The Bank of England last week reportedly also pitched into the City's row against the AIFMD.
Even the US Treasury has allegedly weighed into the row between hedge funds and the European Union over proposed rule changes, which the Treasury says could damage the £849bn sector.
The US is the prime destination for investments by EU alternative funds, and according to the Telegraph reports, 80% of fund mangers are located in the UK.
In Brussels, the draft law has taken centre stage since its inception, with some MEPs blaming the lobby for putting a "marginal" issue ahead of other pending regulation for new macro and micro-prudential supervisors. The central bank sponsored the Financial Markets Law Committee (FMLC) to conduct a study on the draft directive, which concluded that "fundamental issues" would create legal uncertainty and systemic failure.
The draft directive, which is more than 100 pages long, would, according to the industry, limit the activity of EU funds with funds outside the bloc.
First published in April 2009, the AIFMD would essentially allow funds managed from outside the EU to sell products to European investors but only if the regulation of those funds was equivalent to that seen in Europe.
MEP for London Syed Kamall, has been leading a Brussels-based campaign against the draft law and has also held regular briefings in the City of London on the law's potential curtailment of the sector.
"We should all be concerned at the way the AIFM directive will undermine investment returns - most of our pensions are invested in hedge funds, private equity and other 'alternatives' that will be affected. We will end up with smaller pension funds and an aging workforce," Kamall told EurActiv.
1,300 amendments to delay process
EU Internal Market Commissioner Charlie McCreevy had been widely credited for pushing the highly contested directive through the EU executive.
However, now the matter lies with the Council of Ministers and the European Parliament.
Early drafts have shown that the two institutions have very different ideas on how stringent the regulations should be.
The Council has been credited for loosening up some of the draft's bolts under the auspices of the preceding Swedish Presidency and the Parliament has been blamed for limiting the funds' activities such that it would hurt growth in the EU.
The European Parliament is currently wrestling with a record total of 1,300 amendments to the proposed directive.
The rapporteur for the AIFMD, MEP Jean Paul Gauzes, submitted a draft report to MEPs on the law in December.
