Marketing a private fund into the EU should not be too difficult if the UK leaves the single market, according to one fund management and services firm, arguing that non-single market rules were easily navigable.
Andrew Frost, director of investment management solutions at Lawson Conner, said, “Seventy-five to eighty-five percent of investable capital in Europe is located in five jurisdictions, all of which are open to national private placement of funds. We’re very familiar with the national private placement regime, so a difficult Brexit would not pose too much of a burden.”
Venture capital firms were recently offered a hard Brexit lifeline, with the enforcement of the European Venture Capital Fund Regulation (EuVECA), which will ensure venture capital funds can still market in Europe in the case of a hard Brexit.
“EuVECA acts as an assurance of access to Europe for non-EU VCs. As an EuVECA status manager based in London, if the UK became a third country, we could still market in the EU,” Frost said.
No such assistance for other alternative investment fund managers has been suggested.
Prior to EuVECA, which was enforced in May this year, such vehicles fell under the Alternative Investment Fund Directive, which required “a heavy regulatory burden, on top of jurisdiction specific requirements, which adds time and cost for clients,” Frost added.