Simon Walker, chief executive of the BVCA, gave evidence this week to the House of Lords EU Committee on Economic and Financial Affairs on the impact of the proposed directive on Alternative Investment Fund Managers (AIFM) and called for private equity to be removed from the scope of the Directive. He said: “Private equity does not pose a systemic risk of any scale to the wider economic system and the logic of that conclusion, for private equity at least, is that there would be no compelling case for additional regulation.
One is, therefore, driven to the conclusion that the underlying objectives of this Directive are political rather than economic in nature.
Almost 60 per cent of the private equity activity which occurs in the European Union is based in the UK, primarily London. A Directive which made Europe a significantly less attractive area for the highly international industry that is private equity would do far more damage to London and the United Kingdom than to anywhere else in Europe.