Since 2009, the European Union has been considering a Directive to regulate Alternative Investment Fund Managers (AIFMs), including private equity fund managers and investors who invest in such funds. EMPEA has been particularly concerned about third-party provisions that could greatly restrict or make it much more difficult for AIFMs based in emerging markets to raise capital in the EU, and for EU investors to invest in non-EU funds.
We have been monitoring the developments of this regulation. In March 2010, we registered our concerns via a letter submitted to the Spanish Presidency of the EU, which is now leading negotiations on this Directive. EMPEA has sent similar letters to the European Commission and European Parliament.
To view the letters EMPEA sent, please click below:
Fall Update
The October 18 passage of the Alternative Investment Fund Managers Directive by the European Council of Ministers moves the global PE and VC industry one large step closer to having real rules of the game on which to base business decisions. The AIFM deal is not final (it still needs approval of the European Parliament), but the final version will likely be highly reflective of the Council-passed Directive.
The AIFM Directive certainly erects new hurdles over time for European LPs to invest outside of Europe, and for non-European GPs to actively market within the EU. But relative to our worst fears earlier this year when we weighed in strongly against the draft Directive, there appears to have been progress on keeping European markets open for non-EU funds. Non-EU managers will be able to obtain full EU-marketing rights (a marketing Passport) if they comply with certain rules. And as important, the current country-specific private placement regime familiar to any member who has fundraised in Europe, should remain intact for at least another 7-8 years, as the passport regime slowly comes into force. In the coming weeks, we will be analyzing closely the final texts and working with our colleagues at the European Venture Capital Association to understand and report to you the full implications for emerging market funds.
Related Documents
On January 26th, 2010, EMPEA members were invited to join a special complimentary webcast on the Draft EU Alternative Investment Fund Managers Directive, hosted by the Institutional Limited Partners Association (ILPA). For more information about that webcast, please contact EMPEA at webcasts@empea.net.