Buzz Archive:
Impact of Regulation on Investors into Private Equity

by Simon Witney of SJ Berwin LLP, 2/23/2010

Pension funds, banks and insurance companies account for a significant proportion of investment into private equity and venture capital funds in Europe - almost 40% in 2008, according to the EVCA (see chart).  So, while the proposed Alternative Investment Fund Managers Directive is the primary regulatory concern for many in the private equity industry, it is also right to watch closely the continuing reforms of the rules on capital adequacy for financial institutions.  Inappropriate risk weightings for the asset class, forcing investors to hold more capital against their investments than is necessary to protect their solvency, could make fund raising even tougher in the years to come.

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