Margareta Pagano: This Pi man is no square, and he's livid over EU rules

'Parts of UK financial industry could be decimated'
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It's no surprise that David Giampaolo hears a thing or too about what's troubling the brightest and the best in the City.

As one of the most influential operators in the private- equity industry, he's not short on contacts or informed opinion. For the uninitiated, Giampaolo runs Pi Capital, a liaison of 300 or so of the most important wealthy investors in the UK. They include Lastminute founder Brent Hoberman, Alchemy boss Jon Moulton, and Sir Stuart Rose of Marks & Spencer – as well as some of Europe's top industrialists and most secretive hedge-fund financiers.

But it is surprising that he's prepared to talk on the record about what a catastrophe awaits the City if the EU gets its way with the proposed new rules tightening up hedge-fund and private-equity operations. Right now, his phone is red hot from financiers calling him, furious about the EU's proposed new regulations for private-equity players and hedge-fund managers which many claim will put them out of business.

We are sitting in his tiny Berkeley Square offices in central London when he declares: "If the EU goes ahead with these proposals then parts of the UK financial industry will be decimated." He was at the meeting when Boris Johnson, London Mayor, exploded with what his friends call characteristic candour, describing the EU's intentions as "malign". While Giampaolo agrees with Johnson, he says the lobbying campaign needs to do more than just criticise Brussels if we are to get the directive dropped.

So is he right? And is it significant that people like him are "coming out" this week?

I can tell you that he's just one of several who have talked to me in the same terms. How much of it is special pleading? How much of it is based on solid facts, and how much does it matter? Well, to start with, there's been endless analysis of the impact on the hedge-fund industry of the new EU directive but relatively little about the effect on private equity, which could be hit every bit as hard. And, according to Giampaolo, with equally important consequences.

Surely the real point is that nobody is a winner in this battle, neither Paris nor Frankfurt nor any other European city. In fact, the reverse is true. This directive will make it harder for all EU hedge funds to attract funds from outside their borders. In the end this could undercut and undermine the fundamental fabric of Europe's ability to be a player in the alternative asset-management industry.

Lawyers I have spoken to this week say this path could mean an open- ended vulnerability to a stream of protectionist and anti-trust claims, particularly from US players, and could see the hedge-fund and private equity industries move to the Far East.

The routine argument is to say – let it happen. Who cares? This tribe is far too rich anyway and should just set off to different cities. Who needs them? Those arguments might work at the long end of a dinner party but if people like Giampaolo – who started his own gym business at the age of 16 and got to the top – is saying enough is enough, then you've got to start paying attention. Even if clowns like Boris Johnson are on the same side.

Aviva's shares take the harshest cut of all

Investors are justified in asking Aviva – when is a cut a cut? Last week they clearly didn't know the answer, slashing Aviva's shares by 18 per cent on fears that it will cut its dividend. But they had clearly failed to notice that in fact the insurance group has already, discreetly, made the cut.

Aviva announced in March that it had maintained its dividend for last year, but cut its final payment from 21.1p to 19.91p. However, the reduction matched the 10 per cent increase in the interim payment so it did not actually state that it had made a cut. Get it?

Ironically, Aviva's shares fell because it claimed to have maintained the payment when investors thought a cut necessary. Now, in a double-whammy, shares are hit because investors fear a cut will come with next month's interims. Its apparent yield of more than 10 per cent also fails to take account of March's unnoticed cut – the first since 2002. Analysts think the total payment needs to be reduced from 33p a share to about 25p to protect solvency, and the interim payment is expected to be cut below 2007's. Aviva may be forced to make an early Stock Exchange statement to end the dividend confusion. It should, post-haste.

Crude innuendo at Anglo

Spare a thought for Cynthia Carroll, boss of Anglo American, the giant mining company which is being courted by Xstrata. Not only has Carroll been attacked for her stewardship of Anglo, but now she faces some ghastly innuendo from Anglo's former deputy chairman, Graham Boustred, who told a South African newspaper: "If you have a CEO who is sexually frustrated, she can't act properly." In this distasteful interview, Boustred adds that, by contrast: "Men are not, because they can fall back on call girls." This is not only downright rude, but stupid talk.

I can't imagine what Sir John Parker will make of all this when he takes over as chairman in August, but he should move quickly to stamp down on such crudity. Whether he decides to persuade the board, and Carroll, to talk to Xstrata – or indeed ask her to step down – you can be certain he'll do it with his usual gruff charm.

Power games: Who is the greenest of them all?

It's tragic but I'm afraid that the big energy boys are already reverting to type, playing bullying games in the playground about who is the greenest. The latest spat came last week when Ecotricity, British Gas and npower attacked EDF's latest green campaign – Green Britain Day – which launched with a green Union Jack being worn by Olympic cycling champion Victoria Pendleton.

This has prompted much huffing and puffing from Ecotricity – and legal action – which claims that EDF has stolen its Union Jack logo, while British Gas and npower are making fun of EDF, taking out advertisements saying that every day is green in their book. Going green was meant to bring the best out in big business, not turn them green with envy.

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