Toscafund Hedge Fund Says U.K. Would Be Better Off Outside EU

The U.K. would be a “better place” if it left the European Union, according to a London-based hedge fund that manages about $4 billion of assets.

“If the EU doesn’t want to reform we should leave it,” Savvas Savouri, an economist at Toscafund Asset Management, wrote in a report titled “Britain Stands Up -- Better to Exit European Union.”

London’s position as the continent’s pre-eminent financial center would be safe in the event of so-called Brexit because there is no “plausible alternative,” Savouri wrote. Neither Frankfurt or New York can beat London for this “hugely important and lucrative role,” he said.

U.K. Prime Minister David Cameron, who has promised a referendum on EU membership by the end of next year, will hold talks on the issue with European leaders in Brussels this week. HSBC Holdings Plc Chief Executive Officer Stuart Gulliver said Monday the lender would probably move about 1,000 investment bankers to Paris if Britain decided to leave the EU, in one of the most detailed contingency plans revealed ahead of a referendum.

Hedge funds have been split on the issue. Money manager Crispin Odey of Odey Asset Management has questioned the point of being “part of a Europe that keeps mangling us,” while Winton Capital Management founder David Harding has said it is “vital” that the U.K. remains an EU member.