French fund manager BDL says EU markets regulation 'driving us into a wall'

• Passive funds have overtaken actively managed funds in U.S. equities, and their prevalence in Europe channels EU savings into U.S. companies rather than local markets
• Excessive regulation is driving capital from public to private markets, which Beuzelin views as problematic since private equity is 'for the happy few' while public equity allows broader participation
• BDL manages 3.5 billion euros in assets and warns that regulatory agenda is 'driving Europe into a wall' amid fraying transatlantic relations and rising geopolitical risks

Summary: French Fund Manager BDL Criticizes EU Market Regulation

Hughes Beuzelin, CEO of French asset manager BDL Capital Management, issued a sharp critique of European financial regulation at a Milan media presentation on January 28, warning that excessive rules are damaging EU markets and benefiting large U.S. competitors.

Key Points:

BDL manages €3.5 billion ($4.2 billion) in assets through active public equity strategies. Beuzelin argues that hyper-regulation is driving capital away from European public markets toward private markets and passive investment vehicles.

Main Concerns:

• Passive investing dominance: Index-tracking funds have overtaken actively managed funds in U.S. equities, leading to what Beuzelin characterizes as poor capital allocation
• Capital outflow: Since passive funds primarily track U.S. or global indexes, European savings are essentially being exported to fund American companies—a growing concern for EU authorities amid fraying transatlantic relations and rising geopolitical risks
• Private market shift: Excessive regulation is pushing investors toward private equity, which Beuzelin argues is less accessible ("for the happy few") and currently overpaying for acquisitions due to too many funds chasing deals

Market Implications:

Beuzelin highlighted that passive investing creates momentum-driven pricing, noting high valuations in European banks and defense sectors while beverages languish. He advocated for reduced regulatory burden on listed companies to revitalize EU stock markets and retain domestic capital.

The comments reflect broader European concerns about market competitiveness, capital formation, and financial sovereignty as the bloc struggles with anemic public equity markets compared to the U.S.