Growing Business Online – VCs and small firms unite against AIFM directive

The EU’s draft Alternative Investment Fund Management (AIFM) directive, which is due to go before the European Parliament next month, seeks to regulate various types of alternative investment fund, including private equity and venture capital (VC) funds, in response to the global financial crisis.

Opponents say the measures, which would impose greater disclosure requirements on venture-backed businesses, would put VC funds and their portfolio companies at a competitive disadvantage.

More than 500 EU small and medium-sized businesses have signed a letter that was sent to the members of two European Parliament committees (ECON and JURI) last week, addressing their “grave concerns”.

“[The] proposals would prejudice private equity and venture capital-backed companies such as ours, and ultimately restrict access to finance for Europe’s growth companies,” it said.

“We can see no justification to prejudice our companies. Efforts to do so would distort the market, harm finance for innovation and company growth and ultimately inhibit Europe’s economic recovery.”

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