The EU’s private equity lobby has said that a new directive on alternative investment fund managers (AIFM) - to be given the green light by finance ministers on 16 March - will cause the industry to shrink by over a third. After a survey of its members, the European Private Equity and Venture Capital Association (EVCA) revealed that a further third expect their investments to shrink by 30%. “Earlier this month the European Commission laid outs its priorities for its 2020 strategy, including the intent to make ‘an efficient European venture capital market a reality’,” Javier Echarri, EVCA’s secretary-general, said, on 15 March, ahead of the ministers’ meeting. “The AIFM directive, in its current form, is contrary to wider EU policy directives and could significantly counter their effect.”

The directive aims to cover managers of all so-called ‘alternative investment funds’, including hedge funds, private equity, venture capital and real estate and commodity funds, forcing managers to register with their home member state. However, a compromise on non-EU funds and managers written in by Spain has caused delegations to polarise in Council, with the UK dubbing the directive protectionist and France saying it is necessary to safeguard the internal market. EVCA is also concerned about clauses on depositaries, capital and audit requirements and reporting.

The European Parliament’s rapporteur, Jean-Paul Gauzès (EPP, France), has yet to consider all 1,669 amendments to his report on the Commission’s original proposal, released last April. The three institutions aim to reach agreement by the summer on the draft. If agreement is reached in Council, it will give member states the go-ahead to begin talks with Parliament.