In an interview with the Financial Times, Peter Clarke praised the industry watchdog's oversight of British hedge funds and claimed that regulatory ambiguity is likely to arise following the coalition's abolition of the body.
"The FSA has demonstrated over many years successful oversight of the hedge fund industry," he told the newspaper. "The FSA should take some credit for that. What there is [now] is uncertainty, which is unhelpful."
Mr Clarke added that he was unsure whether the scrapping of the organisation - established in its current form by the former Labour government in 2001 - was politically motivated, but called on the current administration to ensure it is adequately replaced.
He also urged the Conservative-Liberal Democrat alliance to rebalance Britain's economy so it is less dependent on its financial companies, while re-establishing London as one of the world's major economic hubs.
The former Morgan Grenfell and Citicorp employee stated that the various financial industries are likely to become less prominent as the nation's other sectors and trades make a tentative recovery following the recession.
Britain's hedge funds took a significant amount of criticism from some sections of the press in the immediate aftermath of the financial crisis and Mr Clarke stressed the importance of a robust regulatory framework to avoid any repeat of the recent slump.
Earlier this year, Man bought out rival operation GLG and Mr Clarke pointed to the takeover as evidence of his firm's commitment to London - but insisted there must be firm but fair legislation and taxes put in place by the government.
Last week, European lawmakers voted in favour of a package of reforms aimed at curbing the activities of the continent's hedge funds.
By Claire Archer