Just one day before a crucial meeting of European finance ministers to hash out final details of the Directive on Alternative Investment Fund Managers, groups like the European Private Equity and Venture Capital Association (EVCA) are making a final push to point out the potential negative impact of the proposed regulations.
The UK, which has lead the opposition among EU member states against the directive, supports such an exemption, as well as proposals to allow variety of institutions to be eligible to act as depositories rather than just credit institutions and authorised investment firms, as mandated in the current draft.
France, Germany, Italy and Luxembourg are reportedly pushing for the directive to pass with stricter rules regarding asset thresholds and depositories, while the UK – which is home to more than 40,000 workers employed by the private equity industry – is joined by Sweden, Finland, Ireland and the Czech Republic in seeking to water down the proposals.
While France and Germany are in favour of making the directive apply to all investment managers that want to market in the EU, UK officials including Chancellor of the Exchequer Alistair Darling have warned that such measures are protectionist and would hurt the EU’s economic competiveness by imposing barriers to investment. They have also brought up the possibility of other governments retaliating by restricting access for European managers, pointing to a recent letter from US Treasury Secretary Timothy Geithner to the European Internal Market Commissioner in which Geithner expressed concerns that US firms would be discriminated against by the directive.