The adviser to the UK’s largest pension fund has become the latest to express concern that the European Commission’s new proposals for the regulation of alternative asset managers will limit investment choice for retirement schemes. It comes as a powerful trade body for hedge funds estimates that the EC directive will cost European schemes billions in potential returns.

The EC put forward proposals in April that alternative fund managers be barred from marketing funds in the EU without first submitting to regulation and adhering to rules on disclosure and transparency.