Bermuda is gaining from heightened regulation of hedge fund managers in Europe in the wake of the Madoff fraud case and global financial crisis.A report by HedgeCo Networks cited Business Bermuda CEO Cheryl Packwood as saying Bermuda’s seen an increase in business and fund moves throughout 2010 as hedge fund managers reconsider their domiciles because of increased red tape.“Regulation has been a key driver for this trend following the 2008 Madoff scandal and a general shift towards greater transparency across global financial markets,” HedgeCo reported.“Year 2011 has been no exception with laws being tightened and new proposals such as the Alternative Investment Fund Mangers Directive (AIFMD) under discussion.”The Alternative Investment Management Association (AIMA) found that AIFMD could potentially cost hedge funds $6 billion, and suggested that the directive would “virtually force hedge funds to consider re-domiciling to new jurisdictions to mitigate the cost impact”.A reported entitled, Re-domiciling & Co-Domiciling for Fund Managers, by Clear Path Analysis, cited Bermuda as a “key” fund jurisdiction, along with Guernsey and Malta.And another study cited by HedgeCo, this one by KPMG, found that more than 50 percent of the UK’s largest companies have considered leaving the UK to re-domicile or co-domicile.Ms Packwood told HedgeCo: “Since Bermuda’s launch in 1986 as a domicile for fund managers, its investment management industry has grown significantly.”She told the Royal Gazette that figures published by the Bermuda Monetary Authority showed 1,165 fund and segregated account companies registered in Bermuda in 2010, and over 300 unit trusts with the combined net asset value of more than $175 billion.This compares with $147.30 billion in 2009.Ms Packwood added: “Now, more than ever, an international fund manager needs a domicile that combines stability and trustworthiness with ease of doing business and incentives to counterbalance the myriad of uncertainties in today’s global economy.”Fiona Le Poidevin, deputy chief executive at Guernsey Finance, told HedgeCo: “Now is time for managers to look at re-domiciling or co-domiciling.The global financial crisis came to a head in 2008, but more than three years later, the wave of repercussions continues. This is particularly true in the Eurozone but also across global markets.“The financial crisis has brought a renewed focus on improved standards including a raft of regulatory proposals e.g. AIFMD. Guernsey’s position outside the EU will enable it to offer a less prescriptive regime for funds not touching this marketplace and this is no doubt helped by the fact that Guernsey has a tax exempt regime for collective investment schemes.”The process of moving funds has become a much more straightforward affair, Emaliese Lofaro, a manager at the Malta Financial Services Authority, told HedgeCo: “There is flexibility in Malta’s regulatory framework allowing a range of fund types and fund structures. Part of Malta’s attractiveness as a fund domicile is also undoubtedly due to the Passporting Regime under the UCITS Directive and in the near future, the AIFMD.”