EU AIFM - Update No. 18

We are now entering the critical phase of the Alternative Investment Fund Managers Directive (AIFMD) with the plenary vote now expected on 6th October with textual approval later in the month. Despite this timeline there is still all to play for. The Belgian Presidency continues to be receptive to BVCA concerns and their compromise proposals are deserving of qualified support. We remain encouraged by provisions on portfolio company disclosure. Whilst the latest represent a compromise with the European Parliament, the principle of maintaining a level playing field for disclosure requirements, regardless of the type of shareholder involved, remain in the text and we will continue to push for their retention. If the EU is serious about fostering growth through SME finance it is essential that private equity and venture capital finance is not disadvantaged.

We do though remain concerned about the global competitiveness of the EU as a destination for private equity and venture capital investment. It is essential not only that European funds are free to market throughout the EU, but also that the EU can attract investment from outside. To that end it is vital that non-EU funds can market to EU investors and vice versa. However, proposals from certain member states actually would restrict investments into European funds from outside it as well as reduce access for EU investors to opportunities outside. This is exactly the sort of proposal that the G20 has railed against and we should continue to resist such protectionist sentiments. We need a genuine passport to foster a free market in the deployment of capital that EU and non-EU funds alike can fully participate in. if we come up short in this respect then capital will simply bypass the EU on its way to our competitor jurisdictions, this cannot be what the drafters of AIFMD intended.