* Hope election results will help alter draft laws
* Right wing allies weakened by split with UK Conservatives
By Simon Meads and Laurence Fletcher
LONDON, June 15 (Reuters) - Hedge funds and private equity firms are hoping a resurgent right wing in European politics will give them stronger support when they call for changes to proposed legislation they see threatening their industries.
The coalition of European conservative parties won a decisive victory in elections last week, taking over 260 seats in the European parliament compared with around 160 seats for its socialist rivals.
"We are viewing this quite positively," said Javier Echarri, secretary general of the European Private Equity and Venture Capital Association.
" are expected to be able to deal with financial regulation on a calmer basis with more understanding than the more emotional debate that we have seen in the parliament in past years," Echarri said.
In April the European Commission put forward controversial draft laws that would force discloure of leveraged positions, give regulators more control over borrowing and control over where hedge funds and private equity could sell their products.
Poul Nyrup Rasmussen, leader of the Party of European Socialists, has been a strong voice for regulation, accusing both industries of "greed and excessive risk-taking".
Hedge fund body the Alternative Investment Management Association (AIMA), which represents more than 1,200 firms worldwide, is lobbying for changes to the draft and welcomed the result of the elections.
"At some stage this will come up for a vote ... At that stage the composition (of the parliament) is very important," said AIMA Chief Executive Andrew Baker.
BRITISH INFLUENCE WEAKENS
The decision of Britain's Conservative party to leave the right wing coalition, however, is seen by some as dampening the effect, weakening Britain's ability to fight directly for the industries, some 80 percent of which are based in the UK.
Despite their 25 seats, the Conservatives' decision has hampered their ability to influence the directive by picking up the pivotal rapporteur role -- which AIMA's Baker says is arguably the most important in the process.
Rapporteurs are MEPs who take the lead on seeing a piece of legislation through parliament, with the most important dossiers usually going to the leading political group.
"I don't take any particular comfort from the European election results," said Simon Walker, chief executive of the British Private Equity and Venture Capital Association.
The BVCA concedes it underplayed the threat of regulation from Europe, but said that has now changed, and hedge funds and private equity firms are looking to Sweden -- home to leading private equity groups EQT and Nordic Capital -- whose six-month presidency of the EU starts in July.
"Sweden is among those countries that tend to be quite pragmatic, so we expect them to be a good presidency in terms of putting order in financial services regulation," said Echarri.
AIMA's Baker said: "We need to meet them."
Sweden will be responsible for building agreement for the draft directive among the Council of Ministers that represents each of the 27 member states and is likely to face continued pressure for tough regulation from Germany and France. (Editing by David Holmes)