EU AIFM - Update No. 13

Last week marked a year from which the European Commission published its first draft of the Alternative Investment Fund Managers Directive. Despite progress having been made in some key areas the latest compromise text-  due to be voted on in the ECON Committee on Monday- contains considerable flaws. As per last fortnight's update, concerns remain over the third country proposals in  Jean Paul Gauzes' lastest compromise text and in addition we are extremely concerned that the exemption thresholds have been lowered to include companies with just 50 employees or more- a clear step backwards from the approach initially taken by the European Commission.

The BVCA has therefore focused much of our efforts over the last fortnight on the impact the AIFMD will have on venture capital and private equity-backed SMEs. Arguments have been made in the Wall Street Journal and Financial Times, stressing that the cost burden on venture funds and high-risk/high-return investments is wholly disproportionate.

In addition we have been working alongside EVCA, the Public Affairs Executive and other national associations urging CEOs of private equity and venture capital-backed SMEs to sign a petition letter which has been sent to all MEPs in the ECON and JURI Committees. To date over 650 CEOs across Europe have become signatories.

The Spanish Presidency remains keen to demonstrate that it has made headway on the Directive and therefore the it currently remains on the agenda of the next ECOFIN meeting, due to take place on the 18^th May. It is very unsatisfactory that the timing of the debate comes just days after the general election in an area of great importance to British interests. We hope that finance ministers will take a sophisticated approach to this highly complex issue.