The Financial Times reports that John Paulson's Paulson & Co. hedge fund is opening up a fund that will be open to retail investors and that "will track its existing investment strategies":
Hedge fund investing is typically restricted to wealthy individuals and institutions only. But the new fund, which will be constructed as a so-called "Ucits" structure, domiciled onshore in Europe, will be open to anyone.
It's interesting that Mr. Paulson is doing this in Europe rather than in America. The FT doesn't really explain why. The Wall Street Journal did an article about the practice back in 2006 that ran under the headline "Is Your Fund Manager Two-Timing You? --- As Hedge and Mutual Funds Increasingly Share Overseers, Critics Fret About Small Investors." It reported that there was some talk among American politicians and regulators of banning individuals from running hedge funds and mutual funds simultaneously, and that "There are 124 individual portfolio managers simultaneously running mutual funds and hedge funds tracked by investment-research firm Morningstar Inc., compared with 112 last year and fewer than 60 in 2002. "
Anyway, the point is that star managers like Mr. Paulson have choices about where to set up their businesses, and their choices will be influenced by where the regulatory framework (and the tax framework) is most favorable.