EVCA Requests a Balanced Valuation of Private Equity

Today, the EVCA responded to EIOPA’s Consultation Paper on Further Work on Solvency of IORPs. In its response, the EVCA recommends that any proposals should reflect the specific characteristics of private equity as a long-term asset class. In this respect, an approach that uses market-based valuation is inappropriate for private equity.

“Our concern is that without a fair approach to determining the value of private equity assets, pension funds may be deterred from investing in the asset class to the detriment of future pensioners and the real economy,”

said Michael Collins, EVCA Public Affairs Director.

Over the past four years, European pension funds have invested €73bn via private equity, in European companies. More than 87% of private equity backed companies are small to medium sized enterprises (SMEs), which constitute the backbone of the European economy.

You can consult the EVCA’s response to the consultation here.