Tuesday July 7, 2009
Simon Walker, chief executive of the BVCA, today gave evidence to the House of Lords EU Committee on Economic and Financial Affairs on the impact of the proposed Directive on Alternative Investment Fund Managers (AIFM) and called for private equity to be removed from the scope of the Directive.
'My core argument today is that the truly sensible way forward would be for private equity to be removed from the scope of this Directive, if indeed a Directive of any form is merited, and considered or not on its own qualities once the recession and the recovery have been dealt with and when it is possible to make a full assessment of the role which private equity can play in the European economy.
A host of distinguished individuals and institutions have examined the question of whether private equity poses systemic risk. Their uniform conclusion is that private equity does not pose a systemic risk of any scale to the wider economic system and the logic of that conclusion, for private equity at least, is that there would be no compelling case for additional regulation.
One is, therefore, driven to the conclusion that the underlying objectives of this Directive are political rather than economic in nature and designed to take the so-called "Anglo-Saxon" notion of capitalism down a peg or seven rather than address any higher and more consequential concern.
Almost 60 per cent of the private equity activity which occurs in the European Union is based in this country, primarily London. A Directive which made Europe a significantly less attractive area for the highly international industry that is private equity would do far more damage to London and the United Kingdom, to the benefit of North America, the Middle East or Asia, than to anywhere else in this continent.
At a time of recession it strikes me as astonishingly counter-productive for the European Union to contemplate hostile action against one of the very few sectors which has both the cash on hand to invest and the instinct and appetite to do so.'
FOR FURTHER INFORMATION PLEASE CONTACT
Nathan Williams, BVCA 0207 420 1807/ 07825 678 701
Tim Hames, BVCA 0207 420 1840/ 07721 508 082
Notes to Editors
1. The British Private Equity and Venture Capital Association (BVCA) is the industry body for the UK private equity and venture capital industry. The BVCA has over 450 member firms, representing the overwhelming number of UK-based private equity and venture capital firms and their advisers.
