EU Green Paper places private equity at the centre of Capital Markets Union

EVCA welcomes this critical initiative and identifies areas for market reform.

Brussels, Belgium - 18 Feb 2015 - The European Private Equity & Venture Capital Association (EVCA) today comments on the European Commission’s Green Paper Building a Capital Markets Union which identifies private equity as an important source of direct financing for companies and infrastructure.

Dörte Höppner, EVCA Chief Executive, said:

“The EVCA welcomes the European Commission’s recognition of private equity (including venture capital and infrastructure funds) as essential sources of financing to be promoted through a Capital Markets Union. Indeed, between 2007 and 2013, our industry invested more than €307 billion euros in 25,000 companies, employing more than 8 million people in the EU. To unlock more of this essential financing, the EU should aim to free up the enormous pool of capital sitting with institutional investors, enabling it to flow across borders to companies that desperately need it. With this critical initiative to enhance the single market, the Commission is taking a key step to growth.”

The EVCA has identified the following areas for market reform where private equity and venture capital have an important role to play and that can help deliver the ambition of a single capital market for Europe:

1. Unlocking the €12 trillion euros of capital sitting with institutional investors to enable funds to flow across borders to companies that need it via a regulatory regime that encourages investment in long-term assets

2. Facilitating fund managers connecting institutional investors with European companies in need of capital. EU rules should help fund managers both to raise capital  and access companies needing investment across national borders

3. Promoting a healthy Initial Public Offering (IPO) market which works for both investors and companies

The EVCA strongly welcomes this initiative and stands ready to work with the European Commission and other participants in the capital markets to ensure that Europe leads the world in providing businesses of all sizes access to finance from a diverse range of sources. We will seek to help the Commission answer the question raised in its Green Paper:

“How can the EU further develop private equity and venture capital as an alternative source of finance for the economy? In particular, what measures could boost the scale of venture capital funds and enhance the exit opportunities for venture capital investors?”

For more information, please read Releasing the potential of Capital Markets Union by EVCA Chief Executive, Dörte Höppner.