Hedge funds reacted angrily today to suggestions from a member of Sweden's government that strictures around how managers are paid could be included in an already controversial directive to regulate their industry.

The $1.5 trillion (€1 trillion) industry has been reacting to comments yesterday from Mats Odell, Sweden's financial markets minister, who said the EU's plans to regulate alternative fund managers could be amended to include similar pay rules to those being imposed on the banking sector.