Dear [MEP personalised], Europe’s SMEs deserve fair treatment and stable investment I write on behalf of my peers and co-signatories, who are the owners and managers of small and medium sized enterprises from across the EU. SMEs form the bedrock of economic activity across Europe and their ability to generate jobs and contribute to wider growth and prosperity is critical in meeting the goals of the EU’s 2020 Strategy. It is from this fertile breeding ground of innovation that the European and international leaders of tomorrow will emerge. Growth businesses require access to long term sources of finance. In the present climate, such finance is scarce, but one important source is private equity and venture capital. These long-term investors provide the capital and expertise necessary to nurture businesses and to propel them on to the next stage in their development. We represent a slice of the 25,000-plus population of European businesses that currently benefit from private equity and venture capital support. We are therefore increasingly alarmed by proposals within the EU’s draft Alternative Investment Fund Management Directive that would prejudice private equity and venture capital- backed companies such as ours, and ultimately restrict access to finance for Europe’s growth companies. We can see no justification to prejudice our companies or to include them in a Directive targeting fund managers. Efforts to do so would distort the market, harm finance for innovation and company growth and ultimately inhibit Europe’s economic recovery. Of particular concern are proposed disclosure obligations for private equity and venture-backed businesses. We do not oppose increased transparency across Europe whatever the type of company or sector it
Letter prepared by Tom B. van Aken, Avantium Technologies B.V., The Netherlands to petition against the proposed AIFM regulation at the initiative of the EVCA
All details on http://www.evca.eu/publicandregulatoryaffairs/default.aspx?id=5574
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Dear [MEP personalised],
Europe’s SMEs deserve fair treatment and stable investment
I write on behalf of my peers and co-signatories, who are the owners and managers of small
and medium sized enterprises from across the EU. SMEs form the bedrock of economic
activity across Europe and their ability to generate jobs and contribute to wider growth and
prosperity is critical in meeting the goals of the EU’s 2020 Strategy. It is from this fertile
breeding ground of innovation that the European and international leaders of tomorrow will
emerge.
Growth businesses require access to long term sources of finance. In the present climate,
such finance is scarce, but one important source is private equity and venture capital. These
long-term investors provide the capital and expertise necessary to nurture businesses and to
propel them on to the next stage in their development.
We represent a slice of the 25,000-plus population of European businesses that currently
benefit from private equity and venture capital support. We are therefore increasingly alarmed
by proposals within the EU’s draft Alternative Investment Fund Management Directive that
would prejudice private equity and venture capital-backed companies such as ours, and
ultimately restrict access to finance for Europe’s growth companies.
We can see no justification to prejudice our companies or to include them in a Directive
targeting fund managers. Efforts to do so would distort the market, harm finance for
innovation and company growth and ultimately inhibit Europe’s economic recovery.
Of particular concern are proposed disclosure obligations for private equity and venture-
backed businesses. We do not oppose increased transparency across Europe whatever the
type of company or sector it operates within. At the same time, we believe there should be a
level playing field for all. We do not see why the law should discriminate against different
types of privately owned companies. We do not see why there should be one set of rules for
private equity and venture-backed businesses and a different set of rules for their competitors
just because of other types of ownership – whether owned by families, oligarchs or large
conglomerates. If protections are necessary, they should be afforded to stakeholders of all
private businesses, and dealt with through horizontal company law.
Compounding this are proposals to disclose matters which are for the board of a company to
determine, such as information related to the development or research policy of a company.
Measures which call for unequal levels of disclosure would be
particularly damaging to venture-backed companies that have invested heavily in product
development and whose ideas may be exploited by much larger rivals, stifling competition.
Finally, we are very concerned that the initial Commission proposal to exclude smaller
businesses from these provisions (below 250 employees) has been watered down in some
proposals to companies with less than 50 employees (Articles 26 to 30). This shows no
understanding of the resource requirements of very early-stage companies at a vulnerable
stage in their corporate development. Rather than protecting them, such new administrative
burden would weaken SMEs.
The cost of complying with the proposed disclosure would be around €30,000 per year – a
very significant outlay for SMEs. The compliance costs and excessive capital requirements of
this Directive will also have a major impact on venture capital firms themselves, and will
radically reduce their ability to back SMEs in the future, while increasing the barriers to entry
for new venture capital funders to emerge. This is an outcome at direct odds with numerous
Commission financed initiatives to promote venture capital.
Much of the chatter around this Directive has focused on the impact on hedge funds, but it is
a big mistake to think that the AIFMD’s impact will be restricted to companies trading in
arcane financial instruments. This is about the real economy, and these proposals will directly
affect tens of thousands of companies across every sector, from fashion to photovoltaics, and
from sandwich making to waste recycling.
Innovative businesses will be central to Europe’s recovery and sustainable economic growth.
We urge policymakers to ensure all companies are treated fairly, to recognise the fragility of
high potential businesses during certain phases of their development, and to ensure that the
AIFMD proposals take into account the vital role played by private equity and venture capital
in this process.
Yours sincerely,
Tom B. van Aken, Avantium Technologies B.V., The Netherlands
Co-signatories:
1. Altin Saliasi, Landeslease Sh.A, Albania
2. Franz Beranek, UC4 Software GmbH, Austria
3. Jon Hoem, Miracor Medical Systems GmbH, Austria
4. Christopher Maier, Ernst Glogar GmbH, Austria
5. Wolfgang WS. Senne, Oridis Biomed, Austria
6. Gabe Gotthard, SmApper Technologies GmbH, Austria
7. Walter Altmann, Winterheller Software GmbH, Austria
8. Wolf Haidinger, Hyperwave AG, Austria
9. Rudolf Schütz, Powerlines Group, Austria
10. Patrick Lecluyse, Betafence, Belgium
11. B. Tas, Sovitec, Belgium
12. Rudy Polfliet, Winsol International NV, Belgium
13. Steve Husk, FRSGlobal, Belgium
14. Board of directors, Biofer NV, Belgium
15. Eddy van Arwegen, Verelst Aannemingen NV, Belgium
16. David Stanks, 3si Security Systems, Belgium and USA
17. Denis Payre, Kiala N.V. and Kiala SAS, Belgium and France
18. Stuart Till, Investor.bg, Bulgaria
19. Ianko Krandarov, Ice Line AD, Bulgaria
20. Bistra Kirova, BM Leasing, Bulgaria
21. José García Hermoso, Fama Serdika EAD, Bulgaria