Publications
& Policy

In this response the PAE details the industry's concerns regarding the scope of the Key Information Document Regulation and the need to adapt it to sophisticated investors. It also highlights the irrelevance of existing performance scenarios for closed-ended and illiquid funds.

In this response we outline several concerns regarding the EBA suggested approach to define the concepts of “investments in private equity” or “investments in venture capital firms” in the context of Article 128 of the Capital Requirements Regulation, as the proposed definitions could create more confusion than clarity, disicentivise banks' investment into private equity and venture capital funds and create a negative precedent for the industry in other legislation.

An in-depth study which outlines the tax environments for the private equity and venture capital industry around Europe, carried out in association with KPMG.

An introduction to the voluntary passport regime offered by the revised European Venture Capital Fund Regulation.

This consultation response explains that problems may arise as under the new standard, unrealised gains/losses would be immediately reflected in the Profit and Loss Statement (P&L). We propose flexibility to allow recycling for investors, i.e. to recognize unrealized gains and losses in Other Comprehensive Income and then recycle to the P&L, or if it wished to recognize unrealized gains and losses in the P&L straight away, then this would avoid unrealised gains/losses being immediately reflected in the P&L while not enabling the investor to use recycling as an earnings management tool.

This position paper raises the concerns of private equity firms holding MiFID license regarding the new prudential regime proposed by the European Commission. It suggests that the new regime will lead to a significant increase in capital requirements for these investment firms, which is not proportionate to the risk they pose.

In this position paper, we welcome the European Commission's targeted amendments to AIFMD, ELTIF and EuVECA to reduce regulatory barriers to the cross-border distribution of investment funds in the EU but stress that the proposed Directive and Regulation are insufficiently tailored to the private equity and venture capital asset class, in particular regarding the definition of pre-marketing.

This letter stresses the importance for the private equity industry of transitional arrangements between the United Kingdom and the European Union after March 2019. It calls for a transition period that would guarantee the continuity of investment into the EU economy, avoid any cliff edge and allow the industry to adapt properly to new long-term arrangements.

This consultation response has been written from a pure AIFMD perspective, outlining in great detail the issues private equity fund managers are facing with the Directive’s requirements in the field of registration, notification and supervisory reporting. Special attention is paid to the divergent application and implementation of the Annex IV requirements.

This Europe Economics report commissioned by Invest Europe shows the impact that the Alternative Investment Fund Managers Directive (AIFMD) has had on private equity fund managers, their investors and the real economy since its entry into force in July 2013.

In this response, Invest Europe has confirmed its support for the European Commission’s work in this field, recognising the fiduciary duty of institutional investors and asset managers to incorporate sustainability factors in their investment decisions and monitoring. However, we feel it is important to maintain a certain level of discretion and flexibility, as it will be up to asset managers and investors themselves to decide and agree on how they do this given they might have different (responsible) investment approaches, clients and beneficiaries, and operate under different (national) legislation.

In this response, the private equity industry supports the European Commission’s initiative to reduce the burden of public offering for smaller firms, noting that these firms are often discouraged from seeking to launch an Initial Public Offering (IPO) on public markets given the amount of requirements they are subject to.

The consultation launched in November 2017 is EIOPA’s final step to reassess the treatment of unlisted equity in the context of Solvency II review. This response reiterates our concern that the current 39% risk charge for private equity does not reflect the actual risk insurers face when investing in the asset class. It suggests therefore that a sub-category of asset should be created to allow for a more appropriate risk calibration. It also underlines that in setting a sound regulatory framework for risk calibration, it is critical that the approach taken reflects the way in which exposure to private equity is achieved by insurers.

This position paper welcomes the publication of the Commission proposal reviewing the European Supervisory Authorities (ESAs). More specifically, it comments on the new ESMA direct supervisory powers over EuVECA and ELTIF funds, on the new funding and governance model and on the risks of making outsourcing and delegation arrangements more difficult.

In this response, Invest Europe has expressed its support for the European Commission’s work in this field, recognising that ESG factors should be part of the fiduciary duty of institutional investors and asset managers. However, there are a few issues that ought to be considered: (i) “material sustainability” should be properly defined; (ii) a one-size-fits-all solution would not be appropriate; and (iii) careful thought should be given to the right way forward (legislative or non-legislative).