BVCA responds to FSA commissioned cost-benefit analysis of the AIFM Directive

"At the BVCA/Private Equity News summit in London yesterday, the FSA warned that the numbers being released today would be "eye-watering". Now that they have emerged it is clear that the costs to investors - largely pension funds and university foundations - are staggering.

This is the first genuine attempt at an economic impact assessment and the detail which is included makes it extremely credible. The notion of a one-off cost to private equity and venture capital combined of 800 million euros and ongoing costs of 280 million euros is simply shocking. It will make Europe a relatively unattractive location in which to conduct private equity or venture capital business. It will drive investments elsewhere and as the report acknowledges would have a highly detrimental effect on employment prospects.

The working party meeting under the auspices of the Council of Ministers and the European Parliament through its Economic and Monetary Affairs Committee must take notice of these findings and avoid a course of action that would be deeply damaging not only to our industry but the European economy.

Regulation of some form is, the BVCA has always argued, inevitable. Regulation of this form with costs on this scale borders on the sadistic. It is not just an assault on private equity. It is ultimately an attack on the workers this industry employs and the pensioners who depend on it for their incomes."

For more information contact Tim Hames on 0207 420 1840.

Notes to Editors

1. The BVCA - The British Private Equity and Venture Capital Association is the industry body for the UK private equity and venture capital industry. The BVCA has over 400 member firms, representing the overwhelming number of UK-based private equity and venture capital firms and their advisers

2. The analysis can be viewed here