Compliance & Regulation

Wellcome to raise concerns on Directive

The CIO of the £13bn Wellcome Trust will advise the UK government on the ‘unintended consequences’ of the proposed Directive.

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Danny Truell, the chief investment officer of the Wellcome Trust, will next week give evidence in the UK’s House of Lords on the impact of proposed European regulation.

On Tuesday Truell will discuss the importance of alternative investment funds, such as private equity and hedge funds, to investors and what the “unintended consequences” of proposed legislation will be, said a statement from the House of Lords.

The process relates to the European Commission’s “Directive on Alternative Investment Fund Managers”, proposed legislation that, if enacted, would require private equity firms operating in Europe to comply with a number of new rules, such as increased reporting and limitations on which funds can be marketed to EU investors.

Truell is likely to pick up on concerns raised in an earlier written response to the Directive, in which Wellcome and other charitable foundations said that it would reduce their ability to select the best managers and limit their access to emerging markets.

As well as hearing from Truell, the Lords will listen to evidence from UK regulatory body the Financial Services Authority. Findings by the House of Lords will be fed back to law makers at the European level.

Wellcome’s appointment to give evidence comes shortly after Richard Wilson, the chairman-elect of the European Private Equity and Venture Capital Association (EVCA), called on more limited partners to stand up and let their concerns be known to members of the European Parliament.

“The weight of LP opinion will play very strongly here,” he said, speaking at the Private Equity International CFOs and COOs Forum in London earlier this month.

Truell, who oversees the investment of a £13 billion (€14 billion; $21 billion) pool of assets, has openly urged those within the private equity industry to modify their practices. In a speech earlier this month at the British Venture Capital Association Summit in London, he said that fund models must be re-examined, deal fees abolished or reduced and investment theses altered.